Quiz 2 in class solutions

Quiz 2 in class solutions - ECON 260: Quiz 2 In-class...

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ECON 260: Quiz 2 In-class Example Solutions Below are discussions that look like full credit answers.  Obviously, these are just samples,  there are other ways to state essentially the same points.   1) Renewable resources, such as timber or fish, should be used no faster than they are  able to be renewed.  Assumptions:  There are two key assumptions that are necessary for this argument to be valid: (a) People alive today are obligated to provide for the well-being of future generations  (alternatively future generations have a right to a some standard of well being).   (b) Providing for future generation’s welfare requires providing them with the same  levels of renewable resources that we have today.  That is, we cannot substitute  other forms of capital for renewable resources and still meet our obligations to  future generations.   Discussion (a) While many people agree that we shouldn’t enrich ourselves at the expense of future  generations, meeting these supposed obligations requires foregoing consumption  today.  We have many poor people today, and some would argue that we have  obligations to improve their welfare as well.   It is not obvious how we should  balance the needs of the future against the needs of the present, but it may be that  our obligations to the future are much lower than those implied by the statement.  (b) The second assumption suggests that it is imperative to provide future generations  with natural resources (and ecosystems) similar to those available to us.  Their  welfare depends on these specific resources.  Many argue that this is not true.  The  historical record suggests that substitutability is pervasive.  Certainly, its plausible 
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This note was uploaded on 04/29/2008 for the course ECON 260 taught by Professor Ward during the Spring '08 term at Lewis & Clark.

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Quiz 2 in class solutions - ECON 260: Quiz 2 In-class...

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