Natural Resource Economics
Natural Resource Economics ECON 4535
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This 3 page Study Guide was uploaded by Bridie Batz on Friday October 30, 2015. The Study Guide belongs to ECON 4535 at University of Colorado at Boulder taught by Staff in Fall. Since its upload, it has received 30 views. For similar materials see /class/232145/econ-4535-university-of-colorado-at-boulder in Economcs at University of Colorado at Boulder.
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Date Created: 10/30/15
Review Questions for Econ 4535 Natural Resource Economics Third Set II An Introduction to Renewable Resources Fishery Economics and the Common Property Problem Static and dynamic CP Problems 1 Why isn t the equilibrium stock size for most common property resources zero Under what conditions would you expect it to be zero In what sense is your answer an explanation of animal extinction 2 Explain as if to an Econ 3070 student why a restriction on the size of shing boats is not an ef cient way to regulate access to a common property shery 3 De ne for the stock of a renewable resource the optimal harvest rate over time Explain intuitively why such a path is intertemporally optimal You can use math if you want its not necessary but if you do make sure its nothing more complicated than simple calculus 4 Restrictions on mesh size is one type of shery regulation that is commonly used and one that is commonly discussed is the literature However we have never discussed mesh size Why was there no need for us to consider mesh size in our simple shery model Describe a shery in which mesh size would be an important variable 5 The simple shery model that we considered in class ignored the age structure of the stock ie implicitly assumed that the stock could be completely described in terms of its biomass Discuss in terms of portfolio theory how the results of our simple shery model would generalize if the diiTerent cohorts age classes of the stock grow at diiTerent rates I expect your answer to be verbal and intuitive not mathematical 6 Given the production lnction h gxE would the common property nature of a sh stock cause the market to fail if there is no lture ie if we live in a one period world What if the production lnction exhibited diminishing marginal productivity in effort 7 In terms of our shery model discuss the relationship between the discount rate and the optimal stock size Xi provide an intuitive explanation of that relationship As part of your answer de ne the discount rate de ne present value and integrate your discussion of the relationship between the discount rate and the optimal stock size to the concept of present value 8 Explain why renewable resources should not be managed so as to maximize their sustainable yield Why do you think maximizing sustainable yield is o en suggested as the appropriate goal of shery and timber management 9 Is sh farming the long term solution to the over exploitation of our ocean s sheries 10 11 Are imposing size limitations such as meat counts in the case of scallops an ef cient way to reduce the harvest rates in common property sheries It is sometimes suggested that the growth function for whales might look as follows X Explain why the growth function looks this way rather than the simpler lnction we have been assuming Will whales be more or less prone to extinction because they have this sort of growth function rather than the simpler type of growth function that we have been assuming Will the market misallocate common property resources that are not scarce Assume that a park is a common property resource Argue both verbally and graphically that the park will be too congested Many regions of the world the southern Sahara Tibet the Amazon Basin etc are undergoing deforestation What is it Is the optimal rate of deforestation zero What factors would determine the optimal rate of deforestation Why might you conclude that current rates are excessive In the paper quotFree Riders en Route to Disasterquot it is suggested that common property renewable resources are eventually driven to extinction Is this always the case Discuss In his article quotFree Riders en Route to Disasterquot Julian Edney describes a common property game involving nuts in a bowl He describes some of the group solutions to the game as quite creative Quoting him quotOne of the groups for example decided that to slow down the harvest they would have to skewer each nut on the end of a pencil balance it on their noses and walk over to deposit it in a chalkboard tray before returning for another single nutquot Edney seems to feel that this quotsolutionquot solved the problem Discuss using economic terminology whether it did Define the term quotcommon property resourcequot your definition should be example free Now give an example not sh of a common property resource Is it a good example Why or why not Explain as if to an Econ 3070 student why the market is incapable of ef ciently allocating common property resources Give an example of a resource that is not a common property resource Explain in terms of their characteristics why some 20 21 22 natural resources are common property resources and others are not Is Hardin predicting that over breeding will lead to our eventual ruin Do you agree Should population growth be controlled through coercion If so what form do you think that coercion should take Discuss the optimality and feasibility of gear regulations and quotas in sheries regulation In his paper quotFree Riders en Route to Disasterquot Julian Edney states that quotTerritorial Division of the commons is actually a rather radical solutionquot Why do I think this statement is silly Argue that having more information about a common property renewable resource will by itself tend to decrease the rate at which it is harvested Now argue that having more information about a common property renewable resource will by itself tend to increase that rate at which it is harvested Verbally argue and graphically demonstrate that a tax on one of the components of shing effort eg a boat tax will result in sh being harvested inef ciently Your answer should include a de nition of ef ciency Why doesn39t tax on per unit catch do the same thing Describe a situation where sh do not grow either through individual growth or reproduction and where it would still be optimal to not harvest all of the sh
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