1. Suppose an unregulated, polluted fishery yields $50 million in consumer surplus and $25 million in producer...

Question:

1. Suppose an unregulated, polluted fishery yields $50 million in consumer surplus and $25 million in producer surplus. Current harvest levels are causing the stock to decline: S = - 50,000. Finally, suppose the current MUC is $10. If pollution control is implemented, then initially harvest levels will not change. However, the decline in the stock will be lessened, to S = - 25,000. Also, the MUC will increase to $15.
a. what is the "price" of the resource?
b. What is the current value of the fishery?
c. What is the value of pollution control?
2. Suppose a country is heavily dependent on its natural resources for production and consumption. The following lists the type of benefits and costs arising at the country level: Market consumption: $20 billion
Value of subsistence use of resources (non-market consumption): $300 billion
Net investment in man-made capital: $5 billion
Changes in resource (S): -50 million units
MUC: 150
Compute both the standard measure of NNP and Green NNP.
3. Suppose the inverse demand for food is P=300-3Q and the supply for food is P=2Q. Calculate the oversupply of food if the government imposes a price flow P1=150.
Stocks
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