ABSTRACT
In this chapter illustrates in terms of a numerical example, which was designed to clarify the relationship between Ricardo's approach to the problem of mines in terms of differential rent theory and Hotelling's approach to the problem of exhaustible resources in terms of royalties. For this purpose it develops a simple model that allows us to incorporate both points of view and the underlying leading principles in a single scheme and discuss its mathematical properties. The chapter stresses the fact that the worlds Ricardo and Hoteling contemplated in their analyses differ in important respects. It presents the model which serves as their work-horse for the following investigation and puts forward the assumed numerical specification. The chapter provides a number of examples constructed in order to illustrate different possibilities as to whether the prices of produced commodities will or will not change as time goes by and some of the natural resources are actually gradually exhausted.
