ABSTRACT
The model includes three goods: labour services, a homogeneous output of production, and a non-renewable natural resource. There are three types of decision-makers: firms, households, and resource suppliers. In the basic model it is assumed that each unit behaves as though it can buy or sell any amount which it demands or supplies of each good at the going market price or wage. The basic model assumes that the only inputs which must be bought are labour services and resource flow. The households are modelled by the standard treatment of household behaviour. The basic model assumes that exchange takes place only under market-clearing conditions. These conditions require a harmonization of the behaviour of firms, households, and resource suppliers as examined. Analysis of the comparative statics of the basic model is concerned with the relationships between the exogenous variables of the model and the values of the endogenous variables which satisfy the market-clearing conditions.
