Given the data of 531,000,000,000 barrels of oil storage found beneath the earth and 16,500,000,000 barrels of oil used in an annual basis, when will we used up the storage of oil beneath the earth? It seems that the answer will be 32 years. In 32 years, which is by the year of 2043, we will used up all the storage of oil that can be found underneath the earth.
What if the data is actually found in 1970's?
We would have finished our oil resource by the year of 2002, but we are still drilling out oil consistently, and even more and more. The annual usage of oil is crazy all over the world. Statistics shows that, by January 2010, we still have 1,349,000,000,000 barrels of oil storage found beneath the earth, which is a triple to the data shown in 1970's, and an annual usage of 30,500,000,000 barrels of oil, which is a double to that of 1970's. How could this ever happen?
Maybe resources are unlimited, but people response to incentives, and as the incentives grow, so does people's action in order to gain more resources, and eventually more incentives to feel good. When the volume of oil decreases, the price of oil increases because of the demand of oil in the market. Higher price means a higher return to those who sell oils. These returns (a form of incentives) drive people to invent more powerful technology to drill more oil, which dramatically increase the volume of oil barrels that can be found beneath the earth.
As stated in previous class, the action of people is purposeful. Economics isn't really about the study of money and money, but rather the study of how purposeful people with unlimited desire response to limited resources. From this we can come out with the definition of economics as the study of SCARCITY.
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