_7, Timber 2 - 1 Quiz#7 Timber-2 1 There is a lovely...

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1 Quiz #7, Timber-2 1. There is a lovely picture-postcard little town named Mendocino on the coast of Mendocino County (but it’s not the county seat). You’ve seen it on TV if you ever watch “Murder She Wrote”, where it’s called Cabot Cove. 70 miles or so northwards is a posh retirement settlement called “Sea Ranch”, nestled among the redwoods. It’s remote by car, for the coast highway keeps dipping and winding, but has its own airport nearby. A number of celebrities maintain vacation homes there. How does the presence of Sea Ranch affect the taxable (“assessed”) value of commercial forest land nearby? a. Raises it, because land values are marked by continuity in space. b. None of the below c. Lowers it, because tourists and private cars get in the way of logging trucks d. Lowers it, because loggers can’t afford to live in pricey Sea Ranch, or commute by air, and have to be paid to commute a long way in their cheap old cars. e. No effect, because the forest landowners can put it under the “TPZ” Act, so the land is assessed based on logging revenue only, using a canned formula legislated in Sacramento that not only fixes the value but lowballs it. 2. Foresters classify land by its quality for growing timber. Site I (that’s a Roman “one”) is the best; Site VII is the worst. How does site quality affect optimal rotation periods under alternative criteria for when to cut timber? a. Under Fisher-Allen there is no direct effect because site rent is not part of the marginal cost of time under Fisher-Allen b. Under CMAI the effect is maximal, because site rent is S/n and it is the only marginal cost of time c. All the above and below
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2 d. Under Faustmann there is an effect but it is diluted, because the marginal cost of time is Si + a, where “a” is the site rent. To justify its “tenure” (or continued life) a growing tree must grow fast enough to pay both interest on stumpage (Si) and site rent (a). e. Under Boulding, site rent is not part of the marginal cost of time (except indirectly, as it is folded into the internal rate of return) 3. You can generally raise yields from timber by investing more money up front: planting better stock; planting nursery stock that is already a few years old; crowding the stems a little and culling out the weaklings after a few years; fertilizing the seedlings; and so on. Which of the alternative rules we have surveyed can give us no guidance as to how much or little of such investing is economically justified? a. Fisher-Allen because its maximand is discounted S, regardless of P b. CMAI, because its maximand is S/n, regardless of P c. Dendrophilic, because its maximand is S (or even more), regardless of cost d. Boulding, because a forest site will reseed itself at no cost to the owner – it is called “volunteer” regeneration. This yields an infinite internal rate of return. You can’t beat that, so no P is ever warranted, if we follow Boulding.
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_7, Timber 2 - 1 Quiz#7 Timber-2 1 There is a lovely...

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