Topic7

Question 1

Renewable Natural Resources

Answer 1

Key Topics:

• Biological growth functions
• Optimal harvesting of renewable resources
• Inefficiency of open access resources

Question 2

Classification of Resources

Answer 2

Categories:

• Renewable (e.g., Fish, Forest): Optimisation needed
• Exhaustible (e.g., Oil, Minerals): Long-term optimisation

Question 3

Biological Regeneration Function

Answer 3

Definition:
- Growth rate depends on population size
- Small stock: Higher regeneration rate
- Large stock: Lower regeneration rate

Question 4

Maximum Sustainable Yield (MSY)

Answer 4

Definition:
- Maximum yield achievable without depleting the resource.
- Found at the peak of the regeneration function.

Question 5

Steady-State Harvest

Answer 5

Key Points:
- Z1 > MSY: Overharvesting, extinction risk
- Z2 = MSY: Sustainable yield
- Z3 < MSY: Equilibria at V1 (unstable) and V2 (stable)

Question 6

Tragedy of the Commons

Answer 6

Concept:

• Shared resources overused due to lack of ownership.
• Solution: Enforce private property or implement taxation.

Question 7

Open-Access Problem

Answer 7

Characteristics:

• No enforceable property rights.
• Fishermen expand efforts until profit = 0.
• Leads to overharvesting and reduced productivity.

Question 8

Private Property Fishery

Answer 8

• Enforced property rights.
• Effort maximised for profit, reducing overharvesting.
• Equilibrium: Lower effort, higher harvest compared to open access.

Question 9

Economic Optimum

Answer 9

• Harvest costs and demand balance.
• Optimal harvest: Marginal utility = Marginal cost.

Question 10

Carrying Capacity of the Habitat (CCH)

Answer 10

• Maximum stock that the environment can sustain.
• Beyond this, growth rate declines.