ECN437Exercise2

ECN437Exercise2 - ECN437 Exercise2 DueMonday2/6...

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ECN437 Exercise 2 Due  Monday  2/6 The Bureau of Land Management is the US government agency in charge of  administering federal lands that are not National Parks (run by the Dept. of  Interior) or National Forests (run by the Dept. of Agriculture). Imagine  you're working there and are given responsibility for deciding what to do in  the following situation. A lumber company would like to log a particular parcel of land. If it goes  ahead, it will earn profits of $1000 this year (year 0) and each of the  following 10 years (years 1 to 10). After the 10th year, assume the forest is  entirely gone and does not grow back (this would be true for a rain forest).  Also, to keep the problem simple assume that it's not possible to stop  logging once it has begun. In other words, you're going to make a once and  for all decision whether or not to allow logging. The standing forest provides external benefits to the local community in the 
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ECN437Exercise2 - ECN437 Exercise2 DueMonday2/6...

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