Markets and Ocean Fisheries
Read: "The Common Pathologies of Overfishing" by John A. Baden and Douglas S. Noonan.
Questions:
- In the absence of government regulation, do individuals possess property rights to fish in the ocean?
- Why are many ocean fisheries experiencing significant declines in the harvest of fish? Is this problem related to the existence of property rights?
- Why would a quota on the total catch in a fishery or shortened fishing seasons lead to too much investment in capital and an inefficient use of resources?
- Would the use of individual transferable permits result in a more efficient outcome? Explain.
- No individuals possess property rights to fish in the ocean.
- The significant declines in fish harvests are the result of increasing demand for fish, more effective technologies for catching fish, and the absence of property rights. Each individual receives all of the benefits from catching additional fish, but the cost of a depleted breeding stock is shared by all participants in the fishery.
- If there is a quota on the total catch in a fishery or a shortened season, each individual fisherman has an incentive to catch as many fish as possible in a very limited time. This encourages excessive investment in boats, nets, etc. The same total number of fish would be caught over a longer period of time at a lower cost per fish if neither of these restrictions were in place.
- With individual transferable permits, each fisherman would be able to catch a particular quantity of fish, no matter how long they spend fishing. This would provide for more effective control over the total harvest than under a fishing season of limited duration and would also provide no incentive to invest in too much capital. The sale of fishing permits would result in the most fishing being done by those who have the lowest cost of fishing.
- No individuals possess property rights to fish in the ocean.
- The significant declines in fish harvests are the result of increasing demand for fish, more effective technologies for catching fish, and the absence of property rights. Each individual receives all of the benefits from catching additional fish, but the cost of a depleted breeding stock is shared by all participants in the fishery.
- If there is a quota on the total catch in a fishery or a shortened season, each individual fisherman has an incentive to catch as many fish as possible in a very limited time. This encourages excessive investment in boats, nets, etc. The same total number of fish would be caught over a longer period of time at a lower cost per fish if neither of these restrictions were in place.
- With individual transferable permits, each fisherman would be able to catch a particular quantity of fish, no matter how long they spend fishing. This would provide for more effective control over the total harvest than under a fishing season of limited duration and would also provide no incentive to invest in too much capital. The sale of fishing permits would result in the most fishing being done by those who have the lowest cost of fishing.
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A. define the specific cause and effect relationship that is being explained by social sciences. B. define a set of circumstances where a model is most likely to apply. C. make economics a social science. D. define the relationship between wants and resources under all circumstances.
Given the demand function in log-linear form: Q = 120 - 1.5P + 12ADV where Q = quantity, P = price, and ADV = advertising expenditures, what is the price elasticity?
A) 1.5, inelastic B) -1.5, elastic C) 120, elastic D) 12, elastic
If the short-run average variable costs of production for a firm are rising, then this indicates that:
A. Average total costs are at a maximum B. Average fixed costs are constant C. Marginal costs are above average variable costs D. Average variable costs are below average fixed costs
Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________. 
A. Rising; A B. Falling; A; C C. Falling; B: C D. Rising; A; C