chapter  1
7 Pages


Changes in the relative availability, value, and cost of resources alter the optimal manner of utilizing such resources. A society's adjustment to changes in factor availability determines both the efficiency of resource use and the limits to economic growth. New technologies have provided suitable substitutes or new inexpensive sources of supply for many resources. However, the supply of other resources essential to certain production processes or living standards can be increased only at higher average costs, if they· can be increased at all. Irrigation water in an arid environment, for example, cannot be completely displaced from the agricultural production process, and supply increases beyond some point already reached in many regions involve substantial rises in cost. While crop yields per unit of water can generally be increased through technology and greater use of complementary inputs and the usable supply of water can be enlarged through investment and improved water management practices, there are economic, if not physical, limitations to such changes. The adjustment process becomes more complicated and crucial to the economic viability of a region when an essential depletable resource such as ground water is involved.