 Homework #8 due today  Homework #9 due next Wednesday  Quiz #4 Wednesday Nov. 14 th  Group Outline due Wed. Nov. 14 th  Exam #4 Wed. Nov 28 th  Homework #10 Wed. Nov. 28th

 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?

 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.

 What is the typical relationship between the economic optimum (E E ), maximum sustained yield (E M ), and the open-access equilibrium (E O )?

 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.

Stock Growth Price = $1,000/ton Cost per Boat is $4,000

 Construct a graph showing the relationship between stock and growth  Find the stock level corresponds to the following: Maximum Sustainable Yield(MSY), natural equilibriums, and the stable and unstable equilibriums

 Now assume that we can translate this population/yield relationship into an economic relationship between fishing boats and total product. Boats Total Product

 Fish prices average $10 per fish and the cost to operate a fishing boat for a year is $40.  Construct a graph showing total revenue and total costs in the fishery.  Derive graphs showing marginal and average revenue and marginal cost.

 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.

 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

 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  ITQs Allocation Auction Grandfathering Lottery