Quote from: bitcoin2cash on September 13, 2011, 11:41:58 PM

Quote from: FirstAscent on September 13, 2011, 05:10:28 PM

Furthermore, as I pointed out in another thread, what happens when a natural resource becomes extremely scarce in unregulated free markets? Do you know? Try to answer that.

When supply drops but demand doesn't, price goes up and then demand drops.

I had to rewrite my post, as I mistakenly deleted the original. The following is not the exact reply I originally wrote, but it's similar.

Your statement is correct, as an economic theory taken verbatim from a text on economics. There is nothing wrong with it, and it makes fine predictions. It's not incorrect when applied correctly. The problem is, it should only be applied where it is applicable. Unfortunately, it's trotted out too often without understanding clearly the terminology it's using.

The error you're committing is in the application of the term 'supply'. Supply, as it is used in economic theory, is defined thus: the quantity of a commodity that is in the market and available for purchase or that is available for purchase at a particular price. If we examine your statement about supply and demand, we can now see that supply refers to goods on the shelf, or what's already in the tank, so to speak. It refers to what's available for purchase right now.

Take a closer look at the question I asked of you. I did not use the term 'supply'. I specifically used the term 'natural resources' and the term 'scarce'. Unfortunately, you and others are mistakenly applying a certain economic theory to the world in an inappropriate manner. By doing so, horrific results are being realized. Now, if you want, you're certainly welcome to answer my original question again. But that doesn't change the fact that we'll have to factor in all your prior statements going back the past few months within the context of how you've indicated the supply/demand curve makes predictions about economics and natural resources under the influence of mankind.

Also, the answer you gave only addresses price dynamics. It does not explore how human behavior changes as a result. Care to take another crack at it?