economic quiz

Econ 456 - Quiz 5

Instructions

Answer the questions below typed and double space. Please submit a hard copy of your responses by December 16th at the start of the final exam.

1. (1/2 page) Listen to the podcast ‘Norway’s got advice for Libya’. What are the policies that Farouk al-Kasim advised Norway to enact in order to avoid the ‘resource curse’? Be through. Was Norway in a unique position to pass such policies? Why or why not?

Farouk al-Kasim advised Norway to limit license blocks they allocate per year, and as the result of that throughout the 70's, no more than 3 or 4 blocks were allocated every year. The speed of extraction of oil is slower. The oil industry is sustainable development of Norway. Norway was in a unique position to pass such policies, because Norwegian politicians truly agree with Farouk al-Kasim. They know that they will get into the oil curse if they don’t take the advice from Farouk. So, they pass the policies decisive. Farouk also advise his home country Iraq, but the government of Iraq was hesitated and perplexed. They don’t even know how to elect the low and which low to vote on. That means they cannot get out from the oil curse.

1. (2 pages) Listen to the podcast ‘The Rhino Hunter’. Corey Knowles argues that hunting the black rhino is the best way to save this critically endangered species. Explain the economic logic behind the argument. Your answer should cover, willingness to pay, property rights, open access (Hint: poaching), free-riding, public goods, use values and existence values. Do you agree with this logic? Why or why not? Evaluate the evidence in the rest of the podcast that either supports this claim or refutes it.

The black rhino will not be that valuable to people when everybody can get the permission of hunting the black rhino. Even the license will be very expensive. (That’s not a big amount for rich people actually.) It can create many job chances when hunting rhino become a kind of business.

We assume that the demand of rhino horn is constant, the supply will goes up when hunting rhino open to everybody. Then the equilibrium price will goes down. So that the rhino horn will be an invaluable thing, people are not willing to pay a high price for it. In other words, people will not put their attention on an invaluable thing. Then their purpose of protecting the black rhino comes true.

I do not agree with this logic, that sounds ridiculous to me. We kill animal for protecting them? I want to protect my family, and so do they. Then should we shot each other, and kill each other? There are only 3,700 black rhinos in the world. If people continue to shot them without limit. They will be history in couple months. If we really want to protect them, just let them live in their own land and leave them away. The safest place in the world is where there is no human being.

In the rest podcast, they also talked about the logic of protecting rhino. The host has talked to a super famous anthropologist. (I can’t spell the name of him, because my English is not good.) The anthropologist gave an inappropriate example to argue the logic, which is about pay school fees for her daughter and get the fee in a ridiculous way. I am stay in the same side with him. The logic is not for protecting the black rhino, it’s for some people’s selfish and greed. Finally we will lose the black rhino totally.

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