So, I get back to my office about half an hour ago, after the first class session of my Environmental Economics course, to find this Marginal Revolution post by Alex Tabarrok on the following question:
You can’t take it with you. A private owner of a natural resource, like a forest, therefore, will want to clear-cut the forest before he dies in order to maximize his consumption stream (assume the owner has no children or other bequest motive). True or False. Explain.
Read Alex’s post for the answer. The interesting thing is that we talked about almost this exact thing in the first day of my class, although we didn’t explicitly engage the bequest motive question.
I also agree with Alex’s comments on the beauty of the logic.