PAYING LANDOWNERS TO HOST WOLVES

question 45

Multiple Choice

PAYING LANDOWNERS TO HOST WOLVES
We can apply the concepts of public goods and free riding to the issue of preserving wildlife.There are some tradeoffs associated with preserving wolves and other wildlife in Yellowstone Park.To environmentalists,wolves are a part of the natural ecosystem.To ranchers,wolves are predators that eat livestock.In other words,there are costs as well as benefits associated with the preservation of wolves,just as there are costs and benefits associated with other public goods such as dams,fireworks,national defense,and space exploration.
One response to the wolf-preservation problem comes from Defenders of Wildlife,an environmental group in Montana.The organization collects money from its members and uses the money to reward landowners who allow wolves to live on their properties.The host landowner receives a payment of $5,000 for each litter of wolf pups reared on the property.In addition,the organization compensates ranchers for livestock killed by wolves.
As a result of these programs,ranchers in the Yellowstone area are more likely to support efforts to maintain the wolves as part of Yellowstone Park's ecosystem.The programs treat preservation as a public good,one that is supported by money contributed by people who benefit from preservation.The organization has collected contributions from thousands of people despite the free-rider problem.The success of Defenders of Wildlife illustrates one of the key principles of economics.
SOURCE: Terry L.Anderson,"A Carrot to Save the Wolf," The Margin,Spring 1992,p.28.
-Recall the application on "Paying Landowners to Host Wolves." Landowners let wolves live on their property because:

• A)a private group pays them for each litter of wolf pups reared on it property.
• B)the government orders them too.
• C)wolves are good for livestock.
• D)all of the above

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