Natural Resource Economics

Instructions


This is the second part of your final exam. It consists of a single problem (with multiple parts) that tests your ability to apply the general concepts tested in Section 1 to solve a specific problem. For each question, be sure to show your work and explain why you are doing what you are doing—how you derived an answer is just as important (if not more) as the answer itself. Answers that are correct but do not show work or explain how they arrived at the answer will only receive partial marks. The problem makes extensive use of Excel. Please include Excel graphs as images to help explain your answers (or draw images that resemble your Excel graphs as close as possible). You must also submit your Excel spreadsheet on Canvas.

Oath

The answers below are my own answers. I did not coordinate with anyone else while completing this final exam. Do you attest to this statement (Yes or No)?

Should we be going nuts over almonds?

Almonds have exploded in popularity in recent years due to their proposed health benefits and the growth in plant-based substitutes for dairy and meat products. As a result, it is not uncommon to see the country side covered with almond trees. While some environmentalists claim that the move towards plant-based products has been positive for reducing greenhouse gas emissions, it has not come without it’s own set of challenges. In particular, almonds are notorious for being water intensive and wreaking havoc on groundwater supplies in local aquifers. In this problem, we will explore some of these challenges and consider some policy options for addressing the problem.

Note: I had grand ambitions for this problem, linking almond farming use to over exploitation of groundwater in aquifers. Unfortunately, I underestimated how hard this problem would be to solve, and in the end, I removed the groundwater portion of the problem from the exam to make it more reasonable. The consequence of this decision is that the problem I am asking you to solve is pretty mundane, inconsequential, and somewhat boring. My apologies.


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