Using present value analysis, an economist will argue that we do not have to worry about loggers harvesting young trees on private land.
A)Because it is more profitable for them to let the young trees grow.
B)Because it is not profitable for them to engage in any logging.
C)Because logging companies do not attempt to maximize profit.
D)Because young tree have no market value.

Question

Quizplus · Accepted Answer

Present value analysis considers the current value of future income streams. In the case of young trees on private land, if loggers were to harvest them, they would receive some income in the short-term, but if they let the trees grow, they would be worth more in the long-term. Therefore, it is more profitable for loggers to let the young trees grow, and thus we do not have to worry about them harvesting them.

Using Present Value Analysis, an Economist Will Argue That We