* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Download When Profits Endanger Species Economics Name: E. Napp Date
Transfer pricing wikipedia , lookup
Pricing strategies wikipedia , lookup
Marketing channel wikipedia , lookup
Gasoline and diesel usage and pricing wikipedia , lookup
Service parts pricing wikipedia , lookup
Dumping (pricing policy) wikipedia , lookup
Perfect competition wikipedia , lookup
When Profits Endanger Species Economics E. Napp Name: __________________ Date: __________________ Economic Concepts Needed for This Lesson: ~ Adapted from Britannica The Power of Price (the amount of money that has to be paid to acquire a given product): 1- Prices perform an economic function of major significance. a) Prices provide an economic mechanism by which goods and services are distributed among the large number of people desiring them. b) They also act as indicators of the strength of demand for different products and enable producers to respond accordingly. c) This system is known as the price mechanism and is based on the principle that only by allowing prices to move freely will the supply of any given commodity match demand. d) If supply is excessive, prices will be low and production will be reduced; this will cause prices to rise until there is a balance of demand and supply. e) In the same way, if supply is inadequate, prices will be high, leading to an increase in production that in turn will lead to a reduction in prices until both supply and demand are in equilibrium. 2- And yet demand can be created. How can demand be created? Questions: 1- Define price. ________________________________________________________________________ ________________________________________________________________________ 2- What do prices determine? ________________________________________________________________________ ________________________________________________________________________ 3- What do prices act as indicators of? ________________________________________________________________________ ________________________________________________________________________ 4- What principle is the price mechanism based on? ________________________________________________________________________ ________________________________________________________________________ 5- What happens to price when supply is excessive? ________________________________________________________________________ ________________________________________________________________________ 6- What does this happen to price when supply is excessive? ________________________________________________________________________ ________________________________________________________________________ 7- What happens to price when supply is inadequate? ________________________________________________________________________ ________________________________________________________________________ 8- Why does this happen to price when supply is inadequate? ________________________________________________________________________ ________________________________________________________________________ The Article: Horn of Scarcity (It is the profit motive, not Asian tradition, that endangers rhinos, elephants, tigers and sharks), The Economist Magazine, April 20, 2013 WRITING in 1917, R.B. Smart, deputy commissioner and settlement officer in Akyab district of British-ruled Burma (now Rakhine state in Myanmar), was worried about local rhinoceroses. His volume of the “Burma Gazetteer” notes that their blood and horns were much prized as medicines and aphrodisiacs. As a result “these animals are ruthlessly hunted down and shot.” The state was already one of the few parts of Burma where rhinos were still fairly plentiful, but “they will become extinct in the near future if not preserved.” Smart’s concern seemed more for the loss of big game for the “European sportsman” to kill than for biodiversity. But he was right. It is a long time since a rhino was seen in the wild in Myanmar. Now Dicerorhinus sumatrensis, once scattered across South-East Asia up to the foothills of the Himalayas, is confined to a few isolated pockets of Indonesia and Malaysia. A 2011 estimate put the global population as low as 216. They are still threatened by poachers, as are other rhino species in India and Africa. In the Kaziranga reserve in India’s north-eastern state of Assam, 16 rhinos have been shot so far this year, and the authorities have started using drones – unmanned aircraft – in an effort to curb poaching. A rhino’s being dead or in a cage affords little protection to its precious horn. In the past two years there have been at least 20 thefts in Britain alone from zoos, museums and private collections. In traditional Chinese medicine, powdered rhino horn was – wrongly – believed to be effective against fevers, rheumatism, gout and much else. It was also used in pre-modern medicine in India, Korea, Malaysia and elsewhere. Asia’s population and wealth have both grown spectacularly. Tens of millions of people have become able to afford expensive cures. Small wonder the rhino and other endangered species are feeling the pressure. The same, after all, is true of many other species whose products are much sought-after in Asia for their culinary, curative or decorative properties. Just this week it emerged that a Chinese vessel that ran aground in a protected coral atoll in the Philippines on April 8th was carrying 400 boxes – ten tons – of meat from the pangolin, the endangered scaly anteater. Better-known prey is the tiger, a living pharmacopoeia: nearly every part of it has medicinal value, or some other lucrative commercial use, such as in a rug. That is why tigers may disappear from the wild. Elephant populations are also in crisis. On March 14th and 15th, just as a ten-day meeting of the parties to the Convention on International Trade in Endangered Species (CITES) was winding up in Bangkok, at least 86 elephants, including 33 pregnant females, were killed by poachers in south-western Chad for the ivory from their tusks. The CITES meeting also had to respond to the crises facing creatures endangered by Chinese fine-dining habits, such as abalone, sea cucumbers and sharks. Shark’s-fin soup is an important part of the Chinese banquet served at weddings and other celebrations. So every year between 100m and 275m sharks are killed for their fins. The CITES meeting added five shark species to the convention’s Appendix II, meaning trade in them will be regulated. The manta ray, threatened by the popularity of its feathery gill-rakers as an ingredient in a health tonic, was also added. The economics of extinction are ruthless. The fewer specimens of a creature there are, the greater the value of its products. Those holding stocks thus have a big financial interest in the creature’s disappearance. The CITES regime – controlling cross-border trade – seems not to be working. So some argue that what is needed is an expansion of trade, using existing stockpiles, farmed animals and the by-products of “trophy hunts”, to bring down the price and cut incentives for poaching. This approach has two big problems. The wild product is always likely to have a certain cachet (European foodies can be known to turn up their noses at farmed salmon). Banyan still remembers the indignation of a vendor in Ho Chi Minh City when he asked in 1997 whether the piece of tiger bone given pride of place in his shop, on plush red velvet, was from a farmed tiger. Second, the bigger the legal market, the easier it is to launder poached goods. So conservation groups are appalled at recent agreements South Africa reached with China and Vietnam, though they are supposed to curb poaching. The groups fear they herald an expansion of the ivory and rhino-horn trade. The conventional view is almost despairing: as the inexorable rise of demand, rooted in centuries-old tradition, meets a dwindling number of wild animals, the future for these species is bleak. But in fact much of the demand is manufactured. Take rhinos. Demand for rhino horn – and poaching to meet it – fell sharply after China banned its use (along with tiger bone) in 1993. The poaching boom had arisen first from a craze for rhino-horn dagger-handles in Yemen, then from China’s high-end market for ivory and rhino-horn carvings. The final blow to the rhino has been soaring demand from Vietnam in recent years. This stems from nothing more substantial than a rumor that rhino horn had cured an (unidentified) former government minister from (unspecified) cancer. Consumer demand is not immutable. Mainstream practitioners of traditional Chinese medicine have long abandoned the banned derivatives of endangered species. In Chinesemajority Singapore a number of big supermarkets and restaurants have stopped stocking sharks’ fins. In Smart’s day, rhino blood was as prized as the horn and “worth its weight in silver”. It is rarely prescribed these days, even in Vietnam. Criminals, and the officials they buy, make a fortune out of the market in endangered species. They are creating the “traditional demand”, not the other way round. Questions: 1- What was the deputy commissioner and settlement officer in Akyab district of British-ruled Burma (now Rakhine state in Myanmar) worried about in 1917? ________________________________________________________________________ 2- Why were “these animals are ruthlessly hunted down and shot”? ________________________________________________________________________ ________________________________________________________________________ 3- What was the global population of Dicerorhinus sumatrensisin 2011? ________________________________________________________________________ ________________________________________________________________________ 4- What have authorities in the Kaziranga reserve in India’s north-eastern state of Assam started using in an attempt to stop poachers? ________________________________________________________________________ ________________________________________________________________________ 5- What beliefs have Asians held about these endangered species and why has demand for these species increased? ________________________________________________________________________ ________________________________________________________________________ 6- Identify several endangered species in Asia and the properties these species are believed to possess. ________________________________________________________________________ ________________________________________________________________________ 7- What is CITES? ________________________________________________________________________ ________________________________________________________________________ 8- Discuss an action CITES has taken to address the issue of species extinction. ________________________________________________________________________ ________________________________________________________________________ 9- Explain the economics of extinction. ________________________________________________________________________ ________________________________________________________________________ 10- Why would an expansion of this trade possibly bring down the price and cut incentives for poaching? ________________________________________________________________________ ________________________________________________________________________ 11- What two problems would arise if the trade was expanded? ________________________________________________________________________ ________________________________________________________________________ 12- How is demand for the products of endangered species manufactured? ________________________________________________________________________ ________________________________________________________________________ 13- What can government officials do to reduce demand for products from endangered species? ________________________________________________________________________ ________________________________________________________________________ 14- Discuss reasons for optimism regarding stopping this trade and reasons for pessimism for reducing this trade. ________________________________________________________________________ ________________________________________________________________________ Analyze the following images: Multiple Choice Questions: 1- Excess supply a) Is when quantity supplied is more quantity demanded. b) Is when quantity demanded is more quantity supplied. c) Describes any price or quantity not at equilibrium. d) Is the point at which quantity demanded is equal to quantity supplied. 2- In the Wealth of Nations, Adam Smith argues that the baker and butcher provide people with food primarily to a) Provide a service. b) Earn a profit. c) Offer a charity. d) Connect with their community. 3- Which of the following correctly illustrates how prices serve as signals to consumers? a) A high price signals to consumers that they should buy a good. b) A low price signals to consumers that the good is not well-made. c) A low price signals to consumers that they should buy a good. d) A high price signals to consumers that the good is well-made. 4- A market in which goods are sold illegally is a) A supply shock. b) Rationing. c) A black market. d) Spillover costs. 5- Which of the following is NOT an advantage of a price-based system? a) Prices act as an incentive for buyers and sellers b) Prices are flexible c) Prices act as signals for buyers and sellers d) Prices can easily be set by the government 6- How are goods and resources distributed in a free market economy? a) Through rationing b) Through prices c) Through government action d) Through disequilibrium 7- Which of the following does NOT apply to a market system? a) It ensures that government intervention is always present. b) It ensures the availability of products that consumers want. c) It ensures that sellers decide to stay in business based on their profits. d) It ensures that sellers respond to changing needs and tastes of customers. 8- In any market, quantities supplied and quantities demanded will a) Never be equal. b) Be equal at only one price and quantity. c) Always be equal. d) Be equal at several different prices and quantities.