Asked by George Maillard Jr. on Jun 05, 2024
Verified
Alex and Ben are both loggers wanting to harvest timber from the same forest.Alex prefers to harvest and replant at a sustainable rate;Ben wants to harvest as many trees as possible to maximize short-run profit,and then move on.They face the same production costs. Refer to the information given.If property rights are poorly enforced or nonexistent:
A) Ben will choose to harvest as quickly as possible,but Alex will choose to harvest more slowly and replant.
B) both will harvest trees as quickly as possible,before the other one does.
C) both now have an incentive to harvest and replant in a sustainable manner.
D) we would expect them to form an agreement on harvesting and replanting.
Property Rights
Legal rights to use, transfer, or sell a particular property or resource.
Sustainable Rate
Refers to the level at which a resource can be used without depleting it, ensuring its availability for future generations.
Production Costs
The total expenses incurred in the process of producing or manufacturing goods or services, including raw materials, labor, and overheads.
- Clarify how the establishment of property rights affects the speed of resource extraction.
- Illustrate the stewardship and sustainability of renewable resources, noting its implications for optimal extraction volumes.
Verified Answer
Learning Objectives
- Clarify how the establishment of property rights affects the speed of resource extraction.
- Illustrate the stewardship and sustainability of renewable resources, noting its implications for optimal extraction volumes.
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