September 28, 2026
Time → value · Week 06
Finish resource allocation, then begin valuing nature
Resume Lecture 5 at page 16, the start of the neodymium market model. Use Classwork 5 to allocate a fixed resource stock across two generations, then turn to values that market prices do not capture.
Sep 28–Oct 2Lecture 5 · Start at p. 16TL Chs. 6–7 → Ch. 4
Focus
- Marginal net benefit and two-period allocation
- User cost, scarcity rent, and the timing of extraction
- The transition from market outcomes to valuing nature
Prepare
- Review Lecture 5 through page 15
- Read TL Chapters 6–7; begin Chapter 4 for valuation
- Bring a calculator for Classwork 5
Practice
- Derive marginal net benefit from demand and supply
- Allocate gravel between present and future generations
- Identify benefits that have no direct market price
Guiding question
How much of a fixed stock should we use now, and what values might a market price leave out?
Learning targets
- Derive marginal net benefit and compare it across two periods using present value.
- Find an efficient allocation of a fixed resource stock and explain its user cost.
- Connect scarcity rent to a resource owner’s decision about when to extract.
- Recognize why valuing nature requires more than observing market prices.
In-class sequence
Continue Lecture 5 from page 16, work through the two-generation gravel allocation in Classwork 5, and introduce Valuing Nature I after completing the resource-allocation topic.
Lecture slides
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This week’s materials
Coming next
Week 7 continues Valuing Nature with revealed-preference methods and benefit transfer.