UNIVERSITY OF OREGON
Department of Economics
DUE: Wednesday, October 15, 2014
Cameron
Economics 410 Natural Resource Economics
Problem Set #1
INSTRUCTIONS: Please answer all questions. To conserve on grading resources, only a subset
of questions worth 20
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8
Question: Will social benefits to recreational anglers
(and possibly commercial fishers) outweigh the social
costs of the intervention (including any perceived risks
of the intervention)?
Propose: Costly intervention to restore the fishery
Invasive
S is the biomass of the fish stock
Y is the harvest/catch
E is the effort (number of boats)
q is the catchability coefficient
P is the price of fish
r is intrinsic growth rate for species
k is the carrying capacity of the environment
a is the cost of eff
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Subject matter of Professor Mastromonacos
EC 434/435 course (was EC 410/510)
Exhaustible/depletable/non renewable
resources need for dynamic
(intertemporal) optimization (extra op cost of
current consumption = forgone future
consumption)
Renewable re
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A
B
Spreadsheet S1.1
change these
r=
1
K=
1
a=
0.5
Xss =
0.5
Yss =
0.25
|G'(Xss)| =
0.5
Xo =
0.1
t
C
D
E
F
G
H
I
J
K
L
original
1 intrinsic growth rate of fish stock
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A Bio-Economic Model of the Fishery (after Whitmarsh, JEE, Fall 1995; compare to T&L Fisheries Chapter Appendix)
Production Function: Y(t) = q E(t) S(t)
Economic Surplus Functions:
Resource rent
R(t) = (P Y(t) - a E(t) )
Average Profitability
w(t) = ( P Y
UNIVERSITY OF OREGON
Department of Economics
DUE: Wednesday, October 15, 2014
Cameron
Economics 410 Natural Resource Economics
Problem Set #1
INSTRUCTIONS: Please answer all questions. To conserve on grading resources, only a subset
of questions worth 20
Lecture 2
Waves of Globalization:
Similarities and Differences
EC 410
Economics of Globalization
Prof. Anca Cristea
1
Popular Claims:
globalization today is unprecedented
countries integration in the global economy is
such a new phenomena
2
Class Answer
Lecture 1: Introduction
EC 410
Economics of Globalization
Prof. Anca Cristea
1
What is Globalization?
Lets start with some graphical
representations
2
What is Globalization?
Lets start with some graphical
representations
3
Global Aviation Flights Netw
EALL 410
Winter 2016
Final Assignment
DUE: March 16 (Noon)
General Instructions
I. Choose TWO (2) out of three questions below and write short essays on your choice of
topic. Each answer should be about 1,200 words (approximately 4 pages for one answer).
Economics of Crime
HW Assignment # 1 Answer Key
1. Suppose there are three individuals. One (Walt) has the utility function
1
u(w) = w 2 . Jesse has the utility function u(w) = 2w, while the Skylar has the
utility function u(w) = 12 w2 .
a. Suppose there
Economics of Crime
HW Assignment # 1
1. Suppose there are three individuals. One (Walt) has the utility function
1
u(w) = w 2 . Jesse has the utility function u(w) = 2w, while the Skylar has the
utility function u(w) = 12 w2 .
a. Suppose there are two pot
New Zealand has been world leader in
ITQs as national fisheries policy. The New
Zealand shelf e.g. squid, jack and blue
mackerel (ITQs adopted as national policy
in 1986)
Iceland shelf capelin and herring,
monkfish (early adopter, along with
Canada and
Profit =aX2+bX+c (namely, a simple quadratic form)
Analytical method for finding the value of X that maximizes
profits:
d /dX = 2aX+b set equal to 0 and solve:
X* = b/(2a) the analytical solution
Simulation method (line search)? For given values of a,
Institutions: Exhaustible resources
1
Marginal extraction costs
Market demand (marginal benefits from production)
Resource stocks/reserves
Discount rates
For an exhaustible resource, these factors interact to yield
marginal user cost = the common (discou
Sometimes just a single slope coefficient if linear and additively
separable specification
Sometimes a function of slope coefficients and variables if
nonlinear in variables model involving things like logarithms of
the Xs, or quadratic forms (squared X
8
If total reserves were just 15
units, what would MC do?
Usual costs you think about in
EC 201 or EC 311
Depend only on the quantity
of the resource you are
extracting in the current
period
Realistic? May actually
depend on cumulative
extraction to d
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Based on the Western scientific tradition of
modeling the world and subjecting models to
empirical testing using real world data
Set of best methods (theoretical and econometric)
allows for internal and external validation
Economists can broadly agr
modern issues
Price controls, cartels, price leaders,
import tariffs and quotas
Externalities, renewables, conservation
Energy Economics
traditional issues
Economics 410/510 Lecture 8
Mid1800s, natural gas manufactured from coal, and mostly local
produc
Chapter 5 in Tietenberg and Lewis: Dynamically efficient intertemporal allocations are
automatically equitable.
Chapter 5 in Tietenberg and Lewis: Weak sustainability requires that the value of the capital stock
(natural plus physical capital) should not
In the western U.S., California has long been
the poster child for water problems
Even in wetter regions, like Oregon, water can
rapidly become a problem if precipitation
happens in the wrong seasons (i.e. insufficient
snow pack to deliver snow melt and
Firm will discount future
profits more heavily if there is
a risk that the resource will be
confiscated by the government
Greater discount rate,
higher future undiscounted
total cost
Less mineral extracted in
each period
Thus, could lower the MUC
so th
Q(t) = exp(a b/t) where b>a>0
As t
, Q(t) exp(a)
No eventual decline in biomass in this case
Exponential form (for our numerical example)
Q(t) = at + bt2 + dt3
Permits overmaturity phase
Cubic form (considered briefly last day)
Two simple function
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If X0 is the initial stock of old growth forest
and Y0 is the initial stock of new growth forest,
then the stock of new growth forest in period
t is simply Yt = (Y0+X0 Xt)
Note that (X0 Xt) is the number of hectares of
old growth forest that have be
Xt = (1+r
rXt/K)Xt
3
Give initial condition for X0 and parameter values,
can calculate the time path of the stock
Xt+1 = Xt + rXt(1 Xt/K)
Iterative form of stock equation becomes:
r is the intrinsic growth rate
K>0 is the environmental carrying capac
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Incentive to harvest until the price becomes lower
than the average cost (i.e. fish as long as profit is
not negative)
No incentive to consider impacts of own fishing
decisions on the current profits of other fishers or
on the future stock and dist
Assignment 3
Nate Adams
Due: Thursday, July 23rd in class
Instructions: You are allowed to work with other students in the course, but homework
must be written up individually. Points will be deducted for answers that are identical to
another students wor