QUESTION 1 [10 marks]

a)Managing of natural resources such as forests in a sustainable way is important. Identify and explain the factors that determine the rate of extraction (harvesting) and the stock of the resource. (5 marks)

b)Discuss how Faustmann's formula is used to determine the optimal cutting or rotational age of trees. (5 marks)

QUESTION 2 [10 marks]

a)Discuss how the fish stock growth rate is determined. (5 marks)

b)How do you determine the optimal sustainable harvest of a specific fishery stock using the Gordon Model. (5 marks)

QUESTION 3 [10 marks]

This question has two [2] separate parts;

a)Explain the Hotelling's rule and its application for resource pricing. (5 marks)

b)Discuss how an inverse Kuznet's curve represents the relationship between pollution and income level. (5 marks)