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Upcoming in Class

Upcoming in Class. Homework #8 Due Thursday Quiz #4 Thursday Nov. 17 th Homework #9 Thursday Nov. 17 th Group Outline due Thursday Nov. 17th Exam #4 Dec. 1st. Homework #8.

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Upcoming in Class

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  1. Upcoming in Class Homework #8 Due Thursday Quiz #4 Thursday Nov. 17th Homework #9 Thursday Nov. 17th Group Outline due Thursday Nov. 17th Exam #4 Dec. 1st

  2. Homework #8 • What is the difference between a stable and an unstable equilibrium in the population of a fishery? Use a graph to support your answer. Where does the maximum sustained yield occur in your graph?

  3. Homework #8 • Use a graph with a total cost curve and a total revenue curve for a fishery to show the difference between the economically optimal harvest, the maximum sustained yield, and the open-access equilibrium.

  4. Homework #8 • What is the typical relationship between the economic optimum (EE), maximum sustained yield (EM), and the open-access equilibrium (EO)?

  5. Relationship between the Fish Population and Growth

  6. The Gordon-Schaefer Model

  7. Market Allocation in a Fishery

  8. The Price of Fish If the price of fish increases, total revenue will increase, shifting the open-access equilibrium higher and the stock of fish lower. As stocks deplete, we move closer to the minimum viable population. Lower stocks imply more scarcity and higher prices.

  9. Public Policies • Private Ownership • Raise the Real Cost of Fishing • NB =0 • Permits or Taxes • Welfare transfer to government • ITQs (Individual Transferable Quotas ) • Welfare depends on initial winners and losers

  10. CANADA'S PACIFIC COAST GEODUCK CLAM FISHERY

  11. ITQ Markets • ITQs Allocation • Auction • Grandfathering • Lottery • Efficient ITQ Market • Quota entitles holder to catch a specified amount of the total authorized catch • Catch authorized is equal to the efficient catch for the fishery • Quotas should be freely transferable among fishermen

  12. Fisheries Problem Find the MSY, natural equilibriums, and identify the stable and unstable equilibriums Price = $1,000/ton Cost per Boat is $4,000

  13. Problem Construct a graph showing the relationship between stock and growth Construct a graph showing the relationship between stock and the growth rate What stock level corresponds to the maximum growth rate? What stock level corresponds to the MSY?

  14. Growth Rate

  15. Growth

  16. A Problem with Fish Identify the stable and unstable equilibriums in a natural state.

  17. Problem 2 Now assume that we can translate this population/yield relationship into an economic relationship between fishing boats and total product.

  18. A Problem with Fishing Boats Fish prices average $1,000 tons and the cost to operate a fishing boat for a year is $4,000. Construct a graph showing total revenue and total costs in the fishery. Derive graphs showing marginal and average revenue and marginal cost.

  19. Problem

  20. Identify the following A natural state with no fishing industry A fishing industry obtaining the MSY from the fishery A fishing industry operating under an efficient management plan, with economically optimal returns A fishing industry characterized by open access.

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