Question 11. Rhinoceroses are an endangered species. Worldwide, the number of rhinos has decreased 90 percent in the past 50 years, to about 29,000. Since 1977, CITES has had ban on international trade in rhino parts. The most valuable part of a rhino is its horn. which can be sold for prices that have risen as high as $100,000 per kilogram. Given the very high price, illegal poaching, in which rhinos are killed for their horns, has increased rapidly Interestingly, if done properly, the horn of a rhino can be harvested without kill- ing the rhino, and the horn will grow back. What challenges does CITES face in attempting to prevent international trade from contributing to the extinction of the rhino?

The United States government subsidizes many so-called green companies. For instance, it has given millions of dollars to solar panel companies. In the market for solar power, illustrate what the government subsidies mean.

A country called Sherwood is very heavily covered with a forest of 50,000 trees. There are proposals to clear some of Sherwoods forest and grow com, but obtaining this additional economic output will have an environmental cost from reducing the number of trees. Table 12.11 shows possible combinations of economic output and environmental protection. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the number of trees, and the quantity of economic output, measured in corn, on the vertical axis. Which choices display productive efficiency? How can you tell? Which choices show allocative efficiency? How can you tell? In the choice between T and R, decide which one is better. Why? In the choice between T and S, can you say which one is better, and why? If you had to guess, which choice would you think is more likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice Q or S? Why?