Question

Discuss how an economist might consider the differences in incentives, efficiency and costs associated with the use of gear restrictions*, fixed quotas# per boat and tradeable catch allowances to deal with overfishing of an open access fishery?

* gear restrictions involve not allowing certain types of fishing activity e.g. trawling nets, # fixed quotas are legal limits on how many fish a boat can catch

Answer 1

Incentives:- In economics incentives means the thing which motivates us to behave in a certain wa while prefences are needs, wants and desires.

Incentives may involve cultural norms, financial rewards and punishments.

Efficiency:- In microeconomics, economic efficiency means a situation in which nothing can be improved without something else being harm. It implies an economic state in which every resource is allocated to serve each individual.

Costs:- Economic cost is the combination of losses of any goods that have a value attached to them. There are four types of cost-fixed cost, variable cost, semi variable cost, total cost.

The differences in incentives, efficiency and costs to deal with overfishing of an open access fishery.

Overfishing is the removal of a species of fish from the water and these species cannot replenish harvesting is unrestricted. To regulate open access fisheries some extreme assumptions in order to simplify the exposition.