Extraction costs of a non-renewable resource include the: 1. cost of removal from the ground only....

Extraction costs of a non-renewable resource include the:

	1.	cost of removal from the ground only.
	2.	cost of removal from the ground plus the cost of preparation for sale.
	3.	cost of removal from the ground, the cost of preparation for sale, and the cost of not being able to extract and sell the resource in the future.
	4.	cost of removal from the ground plus replanting costs.

Property rights for fish from the open ocean:

	1.	do not exist.
	2.	are established by the United Nations.
	3.	exist once the fish are sold at market.
	4.	exist once the fish are caught.

Which of the following policies has succeeded in reducing fishery catch sizes without creating an "arms race" among fishers?

	1.	Limiting the length of the catch season.
	2.	Limiting the number of boats allowed in a given area.
	3.	Limiting catch size (TAC).
	4.	Issuing Individual Transferable Quotas (ITQs).

Solutions

Expert Solution

1) The correct option is 2) Cost of removal from the ground plus the cost of preparation for sale.
The extraction costs mean the cost that is incurred during the extraction of a particular non-renewable resource so this will include the costs during the removal from the ground and also the cost for the preparation of this resource for sale. Replanting costs are not included extraction costs and also the negative costs are not included.

2) The correct option is 4) Exist once the fish are caught.
The property rights for the fish are established by the UN and become active once they are caught. Once they are caught they become private property, they remain state property in the sea.

3) The correct option is 4) Issuing Individual Transferable Quotas (ITQs).
ITQ's are catch shares used by the government to regulate fishing and they set a limit for catching and this policy has succeeeded in regulation fishing.

Rahul Sunny answered 3 weeks ago

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