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Environmental Economics

Economics and Ideology and Other Essays: Studies in the by Ronald L. Meek

By Ronald L. Meek

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Extra resources for Economics and Ideology and Other Essays: Studies in the Development of Economic Thought

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A sole owner, with the exclusive right to harvest the fish stock, would invest in a fleet or hire vessels so that effort maximized rent (profit) p = pY(E) - cE. The simple first-order condition dp/dE = 0 implies pY¢(E) = c, where Y¢(E) is the first derivative of the yield–effort function and pY¢(E) is marginal revenue. Thus, the level of effort which maximizes rent satisfies the familiar economic dictum that marginal revenue should equal marginal cost. Graphically, the rent-maximizing level of effort is identified by finding the point where the revenue curve has a slope of c, the marginal cost of effort, and dropping a vertical to the E-axis.

1c), points where F(X ) < 0 (for K0 > X > 0) correspond to negative net growth, where rates of natural mortality are greater than the rates of birth and survival. 1 reveals that all four growth functions have steady states at X = 0 and X = K. 1b), these are the only steady states. Since net growth for K > X > 0 is positive, the unharvested population, starting from X0, where K > X0 > 0, would, for “small” values of r, tend to the steady state at X = K. 1c) X = K0 is also a steady state, but it is said to be unstable.

3 ming algorithm swings into action. After 10 trials (iterations) Solver announces that it has found a solution and that all constraints and optimality conditions are satisfied. 3. 3. 1 for t = 0, 1, . . 029, and q6 = q7 = q8 = q9 = 0. 05, you have high rates of extraction early on, and exhaustion by period 6 (R6 = 0). Zero values for q6, q7, q8, and q9 are sometimes called “corner solutions,” and they necessitate a modification of the first-order necessary condition discussed in Chapter 1. 3) t =0 and if qt > 0 the ∂L/∂qt = 0 implies 1/(1 + qt) = rlt+1.

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