ABSTRACT
This chapter discusses the correct management of a natural resource, including the correct rate of depletion of the resource, and the level of increased consumption which the resource should support. It also discusses an account of the main microeconomic factors which theoretically determine these decisions. The economy at large will be taken as given and the development of the natural resource will be assumed to have no effects on the functioning of the rest of the economy. The chapter considers some of the more realistic factors which need to be considered before the theoretical model can be made operational. The formal analysis yields the general principles of resource management. The theoretical analysis of resource management yields general guidelines but very little in the way of practical concrete advice. In the late 1970s the expected production levels seemed so high that an active depletion policy seemed to be necessary in order to maintain self-sufficiency throughout the 1980s.
