Question

For each of the following propositions the first word in your answer should be the word True or the word False followed by a brief explanation as to why the proposition is true or false.

Newfoundland’s fishing industry has recently declined sharply due to overfishing, even though fishing companies were supposedly bound by a quota agreement. If all people involved in the fishing industry had abided by the agreement, yields would have been maintained at high levels. According to economists, the failure by fishing firms to abide by the agreement was due to the firms not understanding the consequences of their actions.

Answer 1

Answer : True.

The agreement says that if all firms involve in fishing industry then yields have to be maintained at high levels. If yields maintained at high levels then fish production will increase. If fish production increase then by selling more all firms under fishing industry and the industry itself can earn more profit. So, the actions to maintain yields at high levels are very important. Here economists says that fishing firms who are failure to abide by the agreement not understanding the importance of their actions to maintain the yields at high levels. As actions to maintain the yields at high levels are very important to earn more profit otherwise firms will be failure, hence economists' opinion is true.