Abundant means plenty. I is hard to describe a body heat in terms of quantity. We know, however, that the b.h. is fully renewable so we might describe it as abundandt.
2) Why are energy and oil prices so high? How does scarcity affect their price?
The demnad for oil is: VAST and inelastic, which means that producers can increase the price and still sell virtually the same amount. That is why the oil prices are so high. Another factor is that crude depositis, as an unrenewable resource, will eventually end so the less it will be, the more it will cost.
3) Could this source of heating be described as a market failure? If so, how could we illustrate this on a diagram?
Well we might describe body heat as a positive externality, but only in the case when it is used in some economic purpose, otherwise it is getting wasted.
Here is the diagram showing positive externalities. It is labeled for condoms, but it also works for the body heat:
Yes it will but i cannot really draw any diagram on this thing.
5) Is this heating method something other firms could benefit from? How could they decide whether it is cost-effective?
It can be used to heat every building, providing that enough people will pass through it. It works best, however, when the outside temp. is relatively low and the gas price high (as in the case of cold and expensive Sweden).
6) Is there a role for the government to encourage more firms to use this method? Explain your answer.
Definitely yes. It might be an efficient alternative to gredually more expensive and unrenewable oil. This technology should be developed, mainly due to its simplycity. People just need to be in a building and the rest is going to do itself. I might also be a good idea to instal such a energy creator in places, where people generate more heat. For example gyms.
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