1) Recall the general equation for the dynamics of a natural resources

St+1 = St − Qt +?St

For the stock S_t to be in equilibrium, it must be the case that ?S_t = Q_t

(circle one answer)

1. True
2. False (C) Uncertain

2.

(10 points) Drawing on your recollection of the Helvoigt et al.’s (2003) paper, fill in the blanks in the following key paragraph:

New data indicate that only 51 percent of workers displaced from the Oregon wood products sector during the 1990s remained in Oregon covered employment by 1998. Of these, 45 percent found employment in the — (i)— and wholesale-retail trade sectors. The median wage of separated workers in 1998 was —(ii)— their wage when employed in the wood products sector and below the median wage of all Oregon workers. At least 30 percent of those separated from the wood products sector in the less populous southwestern and eastern portions of the state found new employment in the more urban northwestern region at wages 29 percent —(iii)— than their counterparts who did not move..

(circle only one response- i.e. one row)

1. i: service        ii: below            iii: higher
2. i: high-tech   ii: increase        iii: bigger
3. i: law enforcement  ii: below            iii: better
4. i: technology              ii: aside              iii: less secure
5. i: astronaut  ii: above            iii: lower
6. None of the above

3.

(10 points) Lehner (2012) states the following:

In summary, the Wood Products Industry in Oregon used to have 70,000+ jobs that paid 30 percent more than state average, however due to economic cycles, increased competition, —(i)— and decreased timber harvests on federal lands, the industry now has approximately 25,000 jobs that pay that pay the state average

(circle only one response)

1. Increased frequency of catastrophic forest fires
2. Increased productivity
3. Open access harvesting
4. None of the above

4.

(30 Suppose that the growth rate of the sablefish (Anoplopoma fimbria) stock in the Central Gulf of Alaska fits a logistic function, with parameter values listed in Table 1 below.

Calculate the following potential equilibrium effort levels:

• The effort level (in fishing trips per year) that corresponds to maximum sustainable yield ( MSY ).

(HINT: Solve for stock X and yield Y, then use those to solve for effort E) - The economically efficient (sole-owner) level of effort.

• The open access effort level.

Depict your solutions on a graph that shows total revenue and total cost in this fishery (effort should be shown on the horizontal axis, and dollars should be shown on the vertical axis). The next page is left blank for extra room to work.

6 5.

(10 Which of the following are metrics Weber and Chen (2012) use to analyze the effects of the Northwest Forest Plan (NWFP) on Pacific Northwest communities? (circle one answer)

1. Changes in median household income
2. Changes in real property values
3. Changes in consumer sentiment survey responses
4. Both A and B
5. All of A, B, and C (F)                None of A, B, or C

6.

(10 points) Drawing on your recollection of the Helvoigt et al.’s (2003) paper, fill in the blanks in the following key paragraph:

Although results thus far suggest that —(i)— country in the world stands to gain from fishery recovery regardless of its objectives, some important distinctions emerge across recovery policies. Although all reasonable recovery policies are expected to give rise to increases in biomass of fish, albeit to different levels, we expect the RBFM class of policies, which focuses on economics returns, to achieve the highest levels of —(ii)—. The F_MSY policy will have lower fish biomass, lower profits, and slower recovery times, but upon complete recovery, will ultimately generate the largest —(iii)—.

(circle only one response- i.e. one row)

1. i: the typical rich       ii: profits           iii: catch
2. i: the average poor  ii: rents              iii: biomass
3. i: nearly every            ii: biomass        iii: profits
4. i: the average poor  ii: profits           iii: biomass
5. i: nearly every            ii: biomass        iii: catch
6. i: the typical rich       ii: rents              iii: profits
7. None of the above

7.

(20 points) The owner of one acre of ponderosa pine (Pinus ponderosa) needs to plan a forest rotation length. Unless the owner chooses to sell the forest land, it will be kept in forestry and the chosen rotation will be maintained indefinitely. Assume that the stumpage price is p = $2.00 per cubic feet and the fixed cost of harvest is C = $4,200.00. The volume (in cubic feet) of the stand at any point in time is given by W(t) = at − bt² = 140t − 0.3t², where t is measured in years. Assume that the forest owner uses an annual discount rate of r = 0.01 and that the present value of bare land is S = $20,000 per acre.

1. Write down a condition the forest owner may use to choose a rotation length that maximizes the net present value of profits from timber harvest. In a few sentences, interpret the condition.
2. What is the forest owner’s efficient rotation length, rounded to the nearest year? Show your work, and plot your solution using a figure.