What is an "open access resource"? Why do open access resources often exhibit what is known as the problem of the "tragedy of the commons"? What properties of efficient property rights are violated by an "open access resource"?
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- How can turning a common resource into private property solve the tragedy ofthe commons?Consider the decision to adopt a dog. Describe aprivate cost, a private benefit, an external cost, andan external benefit that result from your decisionto adopt a dog.A country called Sherwood is very heavily covered with a forest of 50,000 trees. There are proposals to clear some of Sherwoods forest and grow com, but obtaining this additional economic output will have an environmental cost from reducing the number of trees. Table 12.11 shows possible combinations of economic output and environmental protection. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the number of trees, and the quantity of economic output, measured in corn, on the vertical axis. Which choices display productive efficiency? How can you tell? Which choices show allocative efficiency? How can you tell? In the choice between T and R, decide which one is better. Why? In the choice between T and S, can you say which one is better, and why? If you had to guess, which choice would you think is more likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice Q or S? Why?
- What are the 3 structures of efficient property rights? Why are property rights relevant to the efficient allocation of environmental goods and services?With Diagram, show how external effects can change supply and demand in electricity generation.Do you think companies are concerned with protecting the environment when they choose to reduce resource use? Explain why they might be. What other reasons might they have for reducing the use of resources?
- Explain thoroughly the tragedy of the commons by Garrett Hardin. What was his ccentral/main idea of the essay. Discuss some main points in the essay.The following data refers to the number of logging operations working in a stretch of tropical rainforest per week. Excluding externalities, the private cost of a logging operation is $25 thousand per week. Logs sell for $1 a piece. Fill in the chart below. # of operations total harvest average harvest average revenue marginal harvest marginal revenue marginal profit 0 0 1 40 2 75 3 105 4 130 5 150 6 165 7 175 8 180 What is the number of logging operations in the forest that maximizes total profit? How much total resource rent is generated at this level of harvest? With open access to the forest, how many folks will wind up logging? With open access, will there be any resource rent earned by the loggers? Suppose the total externalities associated with deforestation could be valued at $10,000 per operation. What is the efficient number of operators? What is the open…↑ The figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture. If property rights to the pasture are granted to a farmer so that the farmer owns the pasture, the farmer raises OA 0 goats OB. 40 goats OC. 50 goats OD. 55 goats 10 20 MSC MC MSB 40 50 80 Number of goos
- Aiticle Link: https://bit.lv/3fbNtrFe The following graph represents the market for high-emissions cars. Answer this question assuming that the externality is not internalised. Price of high tmiiees vekides Secial Value Babetty high emistions vehiles What is the private value of the last unit traded (or the willingness to pay of the marginal buyer) in the market? P1 O P2 O P3 P425. Suppose that there is a large farm and a large recreation firm located on a river. The farm is upstream of the recreational area. The farm uses the streamflow for irrigation. Let S be the amount of streamflow used by the farm and suppose its marginal benefit for irrigation is given by MB-5000-15S. Use of streamflow by the farm is costly to the recreational firm, though, because of lost opportunities for boating, fishing, and camping. Suppose this marginal cost is given by MC=5s. (a) Draw a sketch of the MB and MC curves for use of S by the farm. On your graph, show the efficient level of S by the farm. Solve for this amount from the equations. (b) If unregulated, the farm uses streamflow at a price of zero. Show on your graph what S this corresponds to. Solve for it from the equations. (c) If the government sets a tax price on streamflow, what tax price per unit of S will result in the farm using the efficient level of streamflow? Show on your graph and find with the equations. (d)…2.0 Star LEO 2.0 Lesson Details LEO Modules A myleo.rp.edu.sg//Quiz/TakeQuiz/StartQuiz?id%3Deb8469f1-47dd-eb11-8128-5cb901e2a85 Figure 1 Marginal Social Cost Py Marginal Private Cost 20 15 10 Marginal Private Benefit = Marginal Social Benefit 5. 100 200 300 Quantity Fill in the blanks based on Figure 1. a) Marginal external cost of Product X: $ b) Martinal external benefit of Product X: $ c) Private market price of Product X = $ d) Socially optimal output of Product X: e) Value of Py = $ P Type here to search 99
