Assignment 3

The Svaldbard Global Seed Vault is a facility built on the Norwegian island of Spitsbergen nearly 800 miles from the North Pole to store hundreds of thousands of seeds. The reason for this is to provide a safeguard against the loss of genetic diversity, particularly in food crops. Although permafrost keeps the operating cost of the facility much lower than it would be elsewhere, it still costs $300,000 annually. The funding for this came primarily from the Norwegian government and the Global Crop Diversity Trust.

  • The table below is a made up example of the marginal cost and benefits for each of the players in this ???game???. It costs $3 million to create storage for 100,000 seeds. The marginal benefits for each group are given. What is the overall marginal benefit for each facility size? (2 points)

Seeds in thousands

Cost ($Millions)

MB Norway ($M)

MB Global Crop Diversity Trust ($M)

Total MB

100

3

3

8

??

200

3

2

3

??

300

3

1

2

??

400

3

1

1

??

500

3

.5

1

??

??

??

  • What is the efficient level of provision for this public good? (2 points) _________
  • What level of provision would the Global Crop Diversity Trust choose if it created the facility itself? (1 point) _________
  • Would Norway choose to make a larger facility on its own (that is without coordinating with the Trust)? (1 point) __________
  • In reality there are many other groups not represented here who derive benefits from this project. If only Norway and the Trust fund the project, will it be smaller or larger than socially optimal? (1 point) _____________________
  • What part of the table will change if the construction of the seed vault was twice as expensive as originally thought and what is the new social optimum? (2 points)

??

??

In the McPherson and Nieswiadomy study of elephants (circle the correct answer):

  • In Table 2 what does it mean that the p-value [PR>t] for DROUGHT is 0.57? (2 points, 2 lines max)

___________________________________________________________________________

___________________________________________________________________________

  • In Table 2 what does the negative coefficient for PURGES mean? Keep your answer to 1 (ONE!) line. (2 points)

______________________________________________________________________________

  • From this regression we know that community based programs has (1 point)
    • A positive impact on the growth rate of elephants.
    • A negative impact on the growth rate of elephants.
    • A positive impact on the price of ivory.
    • We cannot tell because the standard errors are too small.
    • We cannot tell because the standard errors are too big.
  • If speculation for ivory increases the price, this will result in MORE / FEWER elephants being killed.
  • The horns from rhinoceros are also poached for similar reasons. It is believed to have beneficial effects in Asian medicine and is made from a substance similar to fingernails. Why might a government raise rhinos, saw off their horns and sell them on the market? Circle one. (1 points).

a. to increase demand for rhinoceros horn, and raise the price

b. to increase supply, and reduce the price of rhinoceros horn

c. to stigmatize ownership of rhinoceros horn, and decrease demand

d. to decrease habitat for wild rhinoceros to crowd out poaching.

  • Circle all the sectors the CAA and CAAA regulate (2 point)
  • Circle all local pollutants (2 point)

NOx???????????????????????? CO2???????????????????? ????????????PM2.5?????????????????????? H2O

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