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1. Species that have reached the extinction threshold and are on the verge of extinction - beluga whales, African elephants, mountain gorillas and the California condor might be classified as nonrenewable resources and once they disappear, there will be no regeneration. Does the market create appropriate incentives to ensure that extinction will not occur? If yes explain. If no, what can be done to ensure that extinction will not occur?
2. Oil is an exhaustible resource. The Organization of Petroleum Exporting Countries (OPEC) is a group of oil producing countries that had formed a cartel for the supply of oil
A) Which countries are involved in the cartel?
B) Explain how the cartel works.
C) What are the implications of oil production by non-OPEC members on the effectiveness of the cartel
D) Can the cartel lead to efficient extraction of oil? Explain
E) How does the cartel affect the marginal user cost?
F) Can OPEC be used as a good example of the extraction of an exhaustible resource? Explain
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what will be the reaction of a buyer about this price changes?
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