This paper examines the optimal extraction sequence of nonrenewable resources in the presence of multiple demands. We provide conditions under which extraction of a nonrenewable resource may be discontinuous over the course of its depletion.

The one demand Hotelling model fails to explain the observed specialization of nonrenewable resources in specific end-uses. We develop a model with multiple demands and multiple resources and grades. Principles of Ricardian absolute and comparative advantage play an important role in determining...