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Economics

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1.(10 points) Recall the general equation for the dynamics of a natural resourcesSt+1=St−Qt+ ?StFor the stockStto be in equilibrium, it must be the case that?St=Qt(circle one answer)True(A)False(B)Uncertain(C)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 Ore-gon wood products sector during the 1990s remained in Oregon coveredemployment by 1998. Of these, 45 percent found employment in the —(i)— and wholesale-retail trade sectors. The median wage of separatedworkers in 1998 was —(ii)— their wage when employed in the wood prod-ucts sector and below the median wage of all Oregon workers. At least 30percent of those separated from the wood products sector in the less popu-lous southwestern and eastern portions of the state found new employmentin the more urban northwestern region at wages 29 percent —(iii)— thantheir counterparts who did not move..(circle only one response- i.e. one row)i: service ii: below iii: higher(A)i: high-tech ii: increase iii: bigger(B)i: law enforcement ii: below iii: better(C)i: technology ii: aside iii: less secure(D)i: astronaut ii: above iii: lower(E)None of the above(F)31.(10 points) Recall the general equation for the dynamics of a natural resourcesSt+1=St−Qt+ ?StFor the stockStto be in equilibrium, it must be the case that?St=Qt(circle one answer)True(A)False(B)Uncertain(C)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 Ore-gon wood products sector during the 1990s remained in Oregon coveredemployment by 1998. Of these, 45 percent found employment in the —(i)— and wholesale-retail trade sectors. The median wage of separatedworkers in 1998 was —(ii)— their wage when employed in the wood prod-ucts sector and below the median wage of all Oregon workers. At least 30percent of those separated from the wood products sector in the less popu-lous southwestern and eastern portions of the state found new employmentin the more urban northwestern region at wages 29 percent —(iii)— thantheir counterparts who did not move..(circle only one response- i.e. one row)i: service ii: below iii: higher(A)i: high-tech ii: increase iii: bigger(B)i: law enforcement ii: below iii: better(C)i: technology ii: aside iii: less secure(D)i: astronaut ii: above iii: lower(E)None of the above(F)3

 

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 economiccycles, increased competition, —(i)— and decreased timber harvests onfederal lands, the industry now has approximately 25,000 jobs that paythat pay the state average(circle only one response)Increased frequency of catastrophic forest fires(A)Increased productivity(B)Open access harvesting(C)None of the above(D)43.(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 economiccycles, increased competition, —(i)— and decreased timber harvests onfederal lands, the industry now has approximately 25,000 jobs that paythat pay the state average(circle only one response)Increased frequency of catastrophic forest fires(A)Increased productivity(B)Open access harvesting(C)None of the above(D)4

 

4.(30 points) Suppose that the growth rate of the sablefish (Anoplopoma fim-bria) stock in the Central Gulf of Alaska fits a logistic function, with parametervalues listed in Table 1 below.Calculate the following potential equilibrium effort levels:- The effort level (in fishing trips per year) that corresponds to maximumsustainable 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 thisfishery (effort should be shown on the horizontal axis, and dollars should beshown on the vertical axis). The next page is left blank for extra room to work.54.(30 points) Suppose that the growth rate of the sablefish (Anoplopoma fim-bria) stock in the Central Gulf of Alaska fits a logistic function, with parametervalues listed in Table 1 below.Calculate the following potential equilibrium effort levels:- The effort level (in fishing trips per year) that corresponds to maximumsustainable 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 thisfishery (effort should be shown on the horizontal axis, and dollars should beshown on the vertical axis). The next page is left blank for extra room to work.5

 

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5.(10 points) Which of the following are metrics Weber and Chen (2012) use toanalyze the effects of the Northwest Forest Plan (NWFP) on Pacific Northwestcommunities?(circle one answer)Changes in median household income(A)Changes in real property values(B)Changes in consumer sentiment survey responses(C)Both A and B(D)All of A, B, and C(E)None of A, B, or C(F)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 standsto gain from fishery recovery regardless of its objectives, some importantdistinctions emerge across recovery policies. Although all reasonable recov-ery policies are expected to give rise to increases in biomass of fish, albeitto different levels, we expect the RBFM class of policies, which focuses oneconomics returns, to achieve the highest levels of —(ii)—. TheFMSYpolicywill have lower fish biomass, lower profits, and slower recovery times, butupon complete recovery, will ultimately generate the largest —(iii)—.(circle only one response- i.e. one row)i: the typical rich ii: profits iii: catch(A)i: the average poor ii: rents iii: biomass(B)i: nearly every ii: biomass iii: profits(C)i: the average poor ii: profits iii: biomass(D)i: nearly every ii: biomass iii: catch(E)i: the typical rich ii: rents iii: profits(F)None of the above(G)7

 

7.(20 points) The owner of one acre of ponderosa pine (Pinus ponderosa) needsto 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 isp=$2.00per cubic feet and the fixed cost ofharvest isC=$4,200.00. The volume (in cubic feet) of the stand at any pointin time is given byW(t) =at−bt2= 140t−0.3t2, wheretis measured in years.Assume that the forest owner uses an annual discount rate ofr=0.01and thatthe present value of bare land is S =$20,000per acre.a) Write down a condition the forest owner may use to choose a rotation lengththat maximizes the net present value of profits from timber harvest. In a fewsentences, interpret the condition.b) What is the forest owner’s efficient rotation length, rounded to the nearestyear? Show your work, and plot your solution using a figure.
 

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