recreational experience (Lancaster 1966). Or the trip itself can be treated as 

 consumption good; once the analytic framework and commodity definition is chosen, 

 a consistent accounting framework emerges that dictates the way in which the 

 economist must distinguish between net and gross economic value. If the trip 

 itself has direct value, then all trip related expenses yield direct utility and 

 produce net social economic value. If the commodity is the on-site recreational 

 experience, all expenses above some bare minimum can be ignored (netted out) in 

 estimating the net economic benefits produced by the experience and the outdoor 

 site. 



COMMON ECONOMIC TERMS 



Six important terms that are often used in natural resource allocation 

 discussions follow: 



Demand curve. Obviously, it would take a textbook to fully define 

 contemporary versions of the concepts of supply and demand. Certain aspects of 

 these terms are briefly reviewed here (Friedman 1962). The demand curve depicts 

 the maximum price that a group of consumers will pay for the offered quantities. 

 Therefore, one should think of the demand curve as dividing the plane into two 

 regions. The first (which lies between the demand curve and the two axes) is 

 a set of attainable price-quantity combinations. The second (which lies above 

 and to the right of the demand curve) is unattainable in the sense that consumers 

 will not pay the higher prices for these larger quantities. 



The demand curve is defined for some fixed period of adjustment between 

 the various points on the curve. The larger the period of adjustment, the 

 flatter (more elastic) the demand curve. The elasticity of the demand curve is 

 usually thought of as reflecting the number of close substitutes available in 

 the market place for the good in question; the more close substitutes, the 

 flatter the demand curve. The demand curve usually depicts a rate of purchase 

 (tires purchased per week, month, or year). Certain items, however, such as 

 paintings by artists who are no longer living, are relatively fixed in supply. 

 In these cases, the demand curve does not have a time dimension and is called 

 a stock demand curve. 



Though demand curves almost always have a negative slope, this fact cannot 

 be deduced from first principles (such as the utility maximization hypothesis). 

 They invariably slope downward because a fall in price makes purchasing 

 sabstitutes less attractive (the substitution effect) and increases the real 

 income of consumers (the income effect). Both effects operate in concert to give 

 the demand curve its downward slope. 



Supply curve. The usefulness of the supply-demand framework stems from 

 the fact that the social forces that shift demand curves often have a negligible 

 effect on the supply curve (and vice versa). The supply curve depicts the 

 maximum quantity that will be forthcoming at the designated price. Hence one 

 should also think of the supply curve as dividing the plane into attainable and 

 unattainable areas. Again, the specification of time for both the rate of 



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