Econ 472 midterm 2014

Topics: Overfishing, Natural resource, Economics Pages: 3 (1033 words) Published: April 27, 2014
Economics 472
Economics of Renewable Resources
Final Examination
April 21, 2012

Time: 2 hours

Answer any THREE questions. Do not attempt to answer more than three questions. The three questions that you answer will be given equal weight.
1.(a)

Consider now a newly planted stand of trees. What decision rule should be employed for determining the “optimal” investment in the trees – the optimal rotation – given that the stand of trees is being managed on a Single Rotation basis? Explain.

(b)

Now suppose that the stand was, instead, to be managed on a Multiple Rotation basis, rather than a Single Rotation basis. What impact would managing the stand on a Multiple Rotation, as opposed to a Single Rotation, basis have upon the optimal rotation period? Would it be correct to say that the opportunity to use the forest land over and over again for growing trees, under Multiple Rotation, would lead to the rotation period being longer than it would be under a Single Rotation basis? Explain fully.

(c)

It has been argued that forest policies in most Canadian provinces have as their long term goal fully regulated normal forests. Explain, with the aid of a simple example, what is meant by the term normal forest, as opposed to a single stand of trees. What relevance, if any, does the idea of a normal forest have to the concept of Maximum Sustained Yield as applied to forestry? Explain.

2.

The economics of renewable natural resources has, in all of its sub-branches, a common theoretical core. The core consists of the closely linked theory of capital and the theory of investment.
You have studied the economics of fishery management and foresty management. In what sense, if any, can fishery resources and forestry resources he regarded a capital assets from the point of view of society? With the aid of examples, discuss the opportunities, which society has to “invest” both positively and negatively, in such resources. What basic rules do the theories...
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