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Unformatted text preview: ESM 242: Assignment #2 Due in class Thursday April 26, 2007 1 Renewable Resources 1. Consider a renewable resource that is unexploited, and so the initial population is at carrying capacity. The resource is then opened up to harvesting, but no restrictions are placed on who can harvest, what technologies they use, or how much they harvest it is an open access resource. (a) How would you calculate the present value of economic returns (i.e. economic rents) to this resource? Are they zero? (b) What conditions are required for this resource to be driven to extinction? How would you calculate how long it would take? (c) What conditions are required for this resource to be sustainably harvested? (d) How does environmental variability affect these conclusions? 2. Suppose a particular resource is governed by the following growth function: X t +1 = X t + rX t (1- X t )- H t (1) where r = 0 . 001 is the intrinsic growth rate of the population, X t is the resource stock and H t is harvest in period t . Note: Throughout this problem, X and H are both in units of 10 4 kilograms. (a) Explain this equation in words....
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- Spring '07