FOR303H1 Lecture 6: Trade and Forests

2.one reason some oppose free trade and the reduction of trade barriers in protectionism, What does old-fashioned protectionism seek to protect? Protectionism traditionally seeks to use trade barriers to protect

A. foreign cultures

B. mature industries

C. domestic jobs

D, us consumers

E. child labot

3. How do property rights affect exterrnalities and market failure?

A, Externalities and market failure will not occur when property rights are incomplete

B, Externalities will be positive and market failure will not occur when property rights are divided equally among market participants

C. Externalities will be positive and market failure will not occur when property rightsare enforced.

D. Externalities and market failure will result from producers having all the property rights.

E.Externalities and market failure will result from the difficulty of enforcing property rights

The structure of property rights can determine how natural resources are used. In general, economists argue that private property rights regimes are more likely lead to an efficient allocation of the resource. However, private property rights are difficult to achieve with some resources and other property rights systems either naturally emerge or, due to the absence of private property, take precedence.

(A) What are the characteristics of private property and why do economists believe these characteristics lead to efficient allocation of the resource?

(B)Can you think of actual situations where private property rights are bounded (limited) by the government or other stakeholders who may have an interest in how private property is used? Why have these situations arisen and what might be the implication for how the resource in question gets used?

(C)What are the other property rights systems we have discussed in class?

(D)Describe actual situations where these types of property rights systems exist.

The scarcity of a resource is a long term shortage of resources. It has resulted from different causes such as high demand, low supply, structural scarcity, and absence of substitutes. The demand-induced scarcity means a higher demand for a resource exceeds its supply. For instance, overpopulation can lead to a high level of consumption of products, and therefore more resources are needed to supply their needs. The supply induced scarcity is a result of the deterioration of the resources. It is also attributed to the changes in climate and weather and the occurrence of natural calamities that would destroy the natural resources. Another cause is the mismanagement of the resource, where there is an unequal distribution of the resources. Lastly, the lack of alternative resources can lead to scarcity, especially for those resources that are already degrading. As a solution, there should be a sustainable use of resources to slow down the degradation of the resources. Another is the use of renewable resources.