It is believed that over time the price path of exhaustible recources
would form a U-shape. Initially prices will show a downward trend due
to technological progress in extraction, followed by a price rising tr
end due to increasing scarcity of resources. Using the optimality theo
rem, this study investigates the availability of nonrenewable natural
resources and examines the possible shape of their price paths for the
period of 1870 to 1987. The analysis, using the linear and quadratic
trend model, supports the U-shaped hypothesis of increasing resource s
carcity.