Why do we need to spend money on energy?




  1. 0 Votes

    This is a question of basic economics.  Economics is the study of scarce resources which have alternate uses.  Take soybeans, for instance.  Assume we have 1000 lbs of soybeans in the entire country.  Some people want to make soybeans into soy milk, others into tofu, and still others want to make it into biofuel.  How do we determine how we will allocate the 1000 lbs of soybeans?

    This is where prices come in.  Prices are a reflection of how much soybeans we have versus how many people want them.  Turning soybeans into an energy source requires money (people have to be employed, machines have to be run, etc.).  We have to spend money on energy because that is how we allocate the scarce resources on the planet which have alternate uses.  

    Economists are fond of the saying “there is no such thing as a free lunch.”  The fact that we have to spend money on energy illustrates this fact perfectly.  If the companies who develop energy technologies gave it away free, it would not actually be free.  The company who developed it would be paying for the energy.  

Please signup or login to answer this question.

Sorry,At this time user registration is disabled. We will open registration soon!