Topic7 Flashcards
1
Q
Renewable Natural Resources
A
Key Topics:
- Biological growth functions
- Optimal harvesting of renewable resources
- Inefficiency of open access resources
2
Q
Classification of Resources
A
Categories:
- Renewable (e.g., Fish, Forest): Optimisation needed
- Exhaustible (e.g., Oil, Minerals): Long-term optimisation
3
Q
Biological Regeneration Function
A
Definition:
- Growth rate depends on population size
- Small stock: Higher regeneration rate
- Large stock: Lower regeneration rate
4
Q
Maximum Sustainable Yield (MSY)
A
Definition:
- Maximum yield achievable without depleting the resource.
- Found at the peak of the regeneration function.
5
Q
Steady-State Harvest
A
Key Points:
- Z1 > MSY: Overharvesting, extinction risk
- Z2 = MSY: Sustainable yield
- Z3 < MSY: Equilibria at V1 (unstable) and V2 (stable)
6
Q
Tragedy of the Commons
A
Concept:
- Shared resources overused due to lack of ownership.
- Solution: Enforce private property or implement taxation.
7
Q
Open-Access Problem
A
Characteristics:
- No enforceable property rights.
- Fishermen expand efforts until profit = 0.
- Leads to overharvesting and reduced productivity.
8
Q
Private Property Fishery
A
- Enforced property rights.
- Effort maximised for profit, reducing overharvesting.
- Equilibrium: Lower effort, higher harvest compared to open access.
9
Q
Economic Optimum
A
- Harvest costs and demand balance.
- Optimal harvest: Marginal utility = Marginal cost.
10
Q
Carrying Capacity of the Habitat (CCH)
A
- Maximum stock that the environment can sustain.
- Beyond this, growth rate declines.
