last word The figure in the Last Word section shows that a 10-fold increase in a

Describe Thomas Malthuss theory of human reproduction. Does it make sense for some speciessay, bacteria or rabbits? What do you think makes humans different? LO19.1

Demographers have been surprised that total fertility rates have fallen below 2.0, especially because most people in most countries tell pollsters that they would like to have at least twochildren. Can you think of any possible economic factors that may be causing women in so many countries to average fewer than two children per lifetime? What about other social or political changes? LO19.1

Resource consumption per person in the United States is either flat or falling, depending on the resource. Yet living standards are rising because of technological improvements that allow more output to be produced for every unit of input used in production. What does this say about the likelihood of our running out of resources? Could we possibly maintain or improve our living standards even if the population were expected to rise in the future rather than fall? LO19.1

A community has a nighttime energy demand of 50 megawatts but a peak daytime demand of 75 megawatts. It has the chance to build a 90-megawatt coal-fired plant that could easily supply all of its energy needs even at peak daytime demand. Should it necessarily proceed? Could there be lower-cost options? Explain. LO19.2

Suppose that you hear two people arguing about energy. One says that we are running out of energy. The other counters that we are running out of cheap energy. Explain which person is correct and why. LO19.3

Recall the model of nonrenewable resource extraction presented in Figure 19.7. Suppose that a technological breakthrough means that extraction costs will fall in the future (but not in the present). What will this do to future profits and, therefore, to current user cost? Will current extraction increase or decrease? Compare this to a situation where future extraction costs remain unchanged but current extraction costs fall. In this situation, does current extraction increase or decrease? Does the firms behavior make sense in both situations? That is, does its response to the changes in production costs in each case maximize the firms stream of profits over time? LO19.4

If the current market price rises, does current extraction increase or decrease? What if the future market price rises? Do these changes in current extraction help to ensure that the resource is extracted and used when it is most valuable? LO19.4

advanced analysis Suppose that a government wants to reduce its economys dependence on coal and decides as a result to tax coal mining companies $1 per ton for everytonof coal that they mine. Assuming that coal mining companies treat this tax as an increase in extraction costs this year, what effect will the tax have on current extraction in the model used in Figure 19.7? Now, think one step ahead. Suppose that the tax will be in place forever, so that it will also affect extraction costs in the future. Will the tax increase or decrease user cost? Does this effect increase or decrease the change in current extraction caused by the shift of the EC curve? Given your finding, should environmental taxes be temporary? LO19.4

advanced analysis User cost is equal to the present value of future profits in the model presented in Figure 19.7. Will the optimal quantity to mine in the present year increase or decrease if the market rate of interest rises? Does your result make any intuitive sense? (Hint: If interest rates are up, would you want to have more or less money right now to invest at the market rate of interest?) LO19.4

Various cultures have come up with their own methods to limit catch size and prevent fishery collapse. In old Hawaii, certain fishing grounds near shore could be used only by certain individuals. And among lobstermen in Maine, strict territorial rights are handed out so that only certain people can harvest lobsters in certain waters. Discuss specifically how these systems provide incentives for conservation. Then think about the enforcement of these property rights. Do you think similar systems could be successfully enforced for deep-sea fishing, far off shore? LO19.5

Aquaculture is the growing of fish, shrimp, and other seafood in enclosed cages or ponds. The cages and ponds not only keep the seafood from swimming away but also provide aquaculturists with strong property rights over their animals. Does this provide a good incentive for low-cost production as compared with fishing in the open seas where there are few if any property rights? LO19.5

last word The figure in the Last Word section shows that a 10-fold increase in a countrys GDP per person is associated with about a 20-point increase in EPI. On the other hand, GDP per person was $48,112 in the United States in 2011 but $36,254 in New Zealand; yet New Zealand had an EPI score of 66.05, while the United States had an EPI score of only 56.59. So does getting rich guarantee doing well environmentally? Discuss.