Natural resources and environmental economics questions.

1. All resources are products of natural cycles. They are all renewable but in relatively different rates and their classification should consider this together with other specific preconditions. What are these preconditions?
2. Discuss the categories of natural resources presented in the class.

Imbalance between the availability of essential resources and future demand was a common belief in the 1960`s and 1970`s and it led to a quite polarized debate. On the one hand, there are scholars who take an optimistics view and on the other hand there are those who view the stock resource scarcity at best as a major barrier to continued economic development (the pessimistic view). Is the portrait of the fate of the world economy painted by the latter view or the” limits to growth” model an accurate one?

The property right concept specifies both the property right relationships among people with respect to the use of things and the penalts for violating these property relationships. Associated with this is the concept of “non-attenuated property right”. Explain this concept as applied to property regimes. Discuss the significance of non-attenuated property rights to economic efficiency.

To what extent can the Boserupian perspective be trusted to resolve the problem of population growth in developing countries, i.e the view which maintains that productivity enhancing intensification spontaneously induced by populationpressure will offset the diminishing returns from fixed area of land?

Two important equilibriums are normally observed in utilisation of renewable resources. These are “bilogical” and “bionomic” equilibriums. Using a combination of graphical and algebraic illustrations explain the differences between the two.

Explain Pareto-optimal allocation of two goods between two households using economic theory and the Edgeworth box. Assume an initial endowment level for the two goods which is Pareto-improving.

The following figure illustrates the point of optimum use of stock resources in line with the Hotelling rule of exploitation of resources. Using your understanding of the rule prove that distance LE in the figure is equal to sistance Q*K.

Common property regimes have a built in structure of economic and non-economic incentives that encourage lack of compliance with existing conventions and institutions.

Assuming two consumers and two goods, the Pareto criterion suggests that an allocation of resources which can be improved upon occurs only when the indifference curves of the two consumers are tangent to each other.

The Pareto criterion avoids a paternalistic attitude. It considers individuals as the best judges to their own well-beings. It also avoids intrapersonal comparison of well-being.