is G.N.P an efficient measure of social welfare?

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Fishy business

British cod – the staple of fish and chips – is on the verge of becoming an endangered species, according to the Worldwide Fund for Nature, the conservation group. It stressed that the crisis in the fishing industry was due to poor management and to overfishing. The total weight of cod caught in the North Sea had halved since the 1960s. Similar falls in catches had occurred for other types of fish.
The WWF proposes the establishment of fishing-free zones to protect areas where young fish grow and develop. The WWF said that such a strategy would lead to increased fish stocks and a larger fishing catch for fishermen within five years. However, the problem may become less urgent as consumer demand for this type of fish may decline in the long run. Some observers believe that for many consumers fish and chips may be an inferior good and, in any case, faces a growing number of alternatives.
Use both your knowledge of economic theory and the information above to answer the following.
1. Using a supply and demand diagram, explain:
a. the impact of falling stocks of fish on the prices and sales of fish; (2 marks)
b. the possible long-term economic benefits to producers and consumers of the WWF conservation plan. (2 marks)
2. From the case presented above, outline 3 factors that affect the demand for British Cod and explain the likely market structures that exit in that economy.6marks
3. By giving 2 reasons for your answer, say whether or not fish has elastic demand4 marks
4. Explain the role of price elasticity of demand and supply in determining the extent to which fish prices would rise as the supply of fish fell.(4 marks)
5. In an effort to restrict the supply and sale of fish, the government places a price ceiling on British Cod. Would this have the desired effect? Why or why not? (Use diagram to illustrate your answer to this question (7 marks)

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In our economy class we learned the definition for scarcity as a good that is desirable and limited. So I asked myself the question what about wather? On our powerpoint-presentation it says that 75 per cent of the whole world is covered by water.
First of all only very little said water is fresh water. In some places fresh water is not a scarce but in other places it is - like in Africa.
The conclusion is that the decision whether a good is a scarcity or not depends on the specific and not on a general situation.

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We learned that choices are made based on three basic economic questions:

What should be produced?
How should things be produced?
Who should things be produced for?

One inherent problem of this decision is that it has to be made without sufficient information. Otherwise the market would be efficient. If, for instance, every farmer in an area is producing patatos and the weather is too cold then the entire production can be lost. Maybe producing corn would not have been as promising but corn might not have been as depending on the weather. So the conclusion is that to make a perfect decision is only theoretical concept and a function of the information available.

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Hi Jason

Impressive use of your wiki to support high school instruction. I wondered, if you get a minute, if you describe how you use this site to support your instruction, what are the strengths and weaknesses of a wiki with high school students?

I have a survey on wiki use over on E Learning for educators if you have a minute to complete. It is under the surveys for US Economic History and the Possibility of a US Recession (which you are welcome to complete.

http://elearningforeducators.blogspot.com/

Greg Pratt
Mesa Community Collage

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Nice work everyone

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I found alex's comment pretty interesting. We all know that physical labor in China is extremely cheap compared to other parts of the world, which is why so many big companies have their products made here. But what will happen when technological innovations are discovered and machines become cheaper and more efficient than human labor? If this were the case, then the production possiblities curve would expand, yet employment would decrease. This is a little confusing though, because when a country is producing at its full potential, shouldn't there be no unemployment? I guess technology plays both a positive and negative role in the economy.

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wow way to go class, looking great!

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