Rajiv, Yakov, and Charles are loggers who live next to a forest that is open to logging; in other words, anyone is free to use the forest for logging. Assume that these men are the only three loggers who log in this forest and that the forest is large enough for all three loggers to log intensively at the same time. Each year, the loggers choose independently how many acres of trees to cut down; specifically, they choose whether to log intensively (that is, to clear-cut a section of the forest, which hurts the sustainability of the forest if enough people do it) or to log nonintensively (which does not hurt the sustainability of the forest). None of them has the ability to control how much the others log, and each logger cares only about his own profitability and not about the state of the forest. Assume that as long as no more than one logger logs intensively, there are enough trees to regrow the forest. However, if two or more log intensively, the forest will become useless in the future. Of course, logging intensively earns a logger more money and greater profit because he can sell more trees. The forest is an example of because the trees in the forest are Rajiv's Profit-Maximizing Response Depending on whether Yakov and Charles both choose to log either nonintensively or intensively, fill in Rajiv's profit-maximizing response in the following table, given Yakov and Charles's actions. Yakov and Charles's Actions Log Nonintensively Log Intensively and Which of the following solutions could ensure that the forest is sustainable in the long run, assuming that the regulation is enforceable? Check all that apply. Develop a program that entices more loggers to move to the area. Outlaw intensive logging. Convert the forest to private property, and allow the owner to sell logging rights.
Rajiv, Yakov, and Charles are loggers who live next to a forest that is open to logging; in other words, anyone is free to use the forest for logging. Assume that these men are the only three loggers who log in this forest and that the forest is large enough for all three loggers to log intensively at the same time. Each year, the loggers choose independently how many acres of trees to cut down; specifically, they choose whether to log intensively (that is, to clear-cut a section of the forest, which hurts the sustainability of the forest if enough people do it) or to log nonintensively (which does not hurt the sustainability of the forest). None of them has the ability to control how much the others log, and each logger cares only about his own profitability and not about the state of the forest. Assume that as long as no more than one logger logs intensively, there are enough trees to regrow the forest. However, if two or more log intensively, the forest will become useless in the future. Of course, logging intensively earns a logger more money and greater profit because he can sell more trees. The forest is an example of because the trees in the forest are Rajiv's Profit-Maximizing Response Depending on whether Yakov and Charles both choose to log either nonintensively or intensively, fill in Rajiv's profit-maximizing response in the following table, given Yakov and Charles's actions. Yakov and Charles's Actions Log Nonintensively Log Intensively and Which of the following solutions could ensure that the forest is sustainable in the long run, assuming that the regulation is enforceable? Check all that apply. Develop a program that entices more loggers to move to the area. Outlaw intensive logging. Convert the forest to private property, and allow the owner to sell logging rights.
Chapter13: General Equilibrium And Welfare
Section: Chapter Questions
Problem 13.12P
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Transcribed Image Text:Rajiv, Yakov, and Charles are loggers who live next to a forest that is open to logging; in other words, anyone is free to use the forest for logging.
Assume that these men are the only three loggers who log in this forest and that the forest is large enough for all three loggers to log intensively at
the same time.
Each year, the loggers choose independently how many acres of trees to cut down; specifically, they choose whether to log intensively (that is, to
clear-cut a section of the forest, which hurts the sustainability of the forest if enough people do it) or to log nonintensively (which does not hurt the
sustainability of the forest). None of them has the ability to control how much the others log, and each logger cares only about his own profitability
and not about the state of the forest.
Assume that as long as no more than one logger logs intensively, there are enough trees to regrow the forest. However, if two or more log intensively,
the forest will become useless in the future. Of course, logging intensively earns a logger more money and greater profit because he can sell more
trees.
The forest is an example of
because the trees in the forest are
Rajiv's Profit-Maximizing Response
Depending on whether Yakov and Charles both choose to log either nonintensively or intensively, fill in Rajiv's profit-maximizing response in the
following table, given Yakov and Charles's actions.
Yakov and Charles's Actions
Log Nonintensively
Log Intensively
and
Which of the following solutions could ensure that the forest is sustainable in the long run, assuming that the regulation is enforceable? Check all that
apply.
O Develop a program that entices more loggers to move to the area.
Outlaw intensive logging.
Convert the forest to private property, and allow the owner to sell logging rights.
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