Question

Suppose you are the owner of a forest stand. You are currently weighing the costs and the benefits of increasing the rotation length for all of your forest rotations. Which of the following statements should you consider in your decision?

A. All of these statements should influence your decision.
B. The opportunity cost of of delaying the benefits of all future forest rotations.
C. The opportunity cost of delaying the benefits received from cutting the current stand.
D. The marginal benefit of letting the current forest stand grow a little longer.

Answer 1

The correct answer is option D. When weighing the costs and benefits of increasing the rotation length for all forest rotations, you should consider the opportunity cost of delaying the benefits received from cutting the current stand and the marginal benefit of letting the current forest stand grow longer.

Step-by-step explanation:

In making the decision to increase the rotation length for all forest rotations, you should consider the following statements:

1. The opportunity cost of delaying the benefits received from cutting the current stand: By extending the rotation length, you delay the benefits that would be gained from cutting the current stand, such as revenue from timber sales.
2. The marginal benefit of letting the current forest stand grow a little longer: Increasing the rotation length allows the forest to grow and mature, potentially leading to increased timber yields and higher quality wood.

Therefore, the option you should consider in your decision is option D: The marginal benefit of letting the current forest stand grow a little longer.