Impact of Mahogany Trade on Early America

This assignment examines the influence of the mahogany trade on early America. It requires students to investigate the costs associated with this luxurious commodity and assess its wider repercussions on social structures, economic systems, and the natural environment. Drawing upon provided sources, students must critically evaluate the multifaceted impact of the mahogany trade during this historical period.

INDIVIDUAL
ASSIGNMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
a) Explaining tax on Procedures................................................................................................1
b) Quotas.....................................................................................................................................2
c) Equilibrium price and quantity...............................................................................................3
TASK B...........................................................................................................................................5
TASK C...........................................................................................................................................7
TASK D...........................................................................................................................................8
CONCLUSION ...............................................................................................................................9
REFRENCES.................................................................................................................................10

INTRODUCTION
The vital areas of economics are linked with identification of conflicts that arise in
economy. There are various political and social factors which are related with the main cause of
conflicts but we are having our main focus on the economic causes. The main objective of this is
linked with exploration of link course between violence and the economical activities. In this
report, studies are made about harvesting of mahogany plant which are available in Brazilian
forest. This plant is important value and it looks very beautiful. The main producer who grows
this plant is Brazil. We will discuss that illegal harvesting of mahogany had the situation of
increase in homicide. When any of the activities become illegal than there is no system called as
justice and the conflicts are settled with the help of violence in economy.
TASK 1
a) Explaining tax on procedures
The harvesting of mahogany was affected after the government introduced tax policies as
they had to pay compulsory tax on export and import of these products. Before conditions when
the tax plans were not introduced, Brazilian people were harvesting their plants rigidly as they
were not having any restrictions.
Taxation impact on equilibrium prices: It refers to the situation where prices of products
are equivalent to demand and supply factor in economy. This can also be analysed as the
situation where quantity demanded is equal to supply ratios. From the above graph, it can be
evaluated that the point where demand and supply curve are meeting that point is called as
equilibrium.

Quantity Traded: It refers to economic policy where factors of production are brought
and they are sold to the customers in market. In most of the market areas, amount of quantity
traded will depend on the equilibrium situation in economy where demand and supply curve are
interacting. This is useful in the evaluation of market prices.
Welfare Economics: They are called as subdivision of economics to find out the welfare
levels in economy. It starts when the functions linked with welfare are divided which are used
for ranking resource allocation in economy.
b) Quotas
Quotas: It is the limit which is imposed on the products which are exported to country.
When there is no trading, the market prices of equilibrium will occur at domestic supply
and demand rates. The prices of products in the world will be lower than the prices of those
countries which are not involved in trading. If there is free trading from countries in rest of the
world, then supply curve will be perfectly elastic.
If quotas are imposed then there is shortage of products and prices goes high as the sum
total of all outputs will decrease. The amount of fall is relevant with the level of quota. As the
price increases, there are incentives for domestic organisation as they can increase their outputs.
Welfare Economics: As the quotas are imposed, there will be increase in the welfare of
economy as domestic firms will have opportunities to sell their products due to imposed limits.
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Quantity Traded: When quotas are imposed, there is decline in the exports which are
coming in country. This is because of the reason that limits are imposed on the amount which
can be traded. This affects the equilibrium prices as demand will not be equal to supply.
c)
)i Punishment
The punishment for consumption of mahogany plants are undesirable because of stigma
which is linked with consumption of such products. If there is ban on the consumption of their
products then demand in economy will be equal but the supply in will be less as government has
imposed quotas. Thus, the demand and supply will not be in equilibrium state.
ii)
iii)
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Brazilian government has taken measures to control the illegal harvesting. Thus, they
imposed various laws and regulations in order to stop them. They have assigned limits to the
quantity which can be exported as well as penalties are imposed by government if people would
not follow the rules and regulations. If there is no change in Mahogany harvesting then there will
be no effect on the demand and sully ratios but changes can affect the supply falls in the
economy.
iv)
According to the view point of economist, tax which was imposed by the government
was not effective as demands were inelastic in economy. He advised that there better and
effective ways to reduce Mahogany harvesting is to reduce there overall demands from the
economy. There is a logic behind this views as the demands ratios in the economy will decease
than exporters will supply less as there is less people to consume them thus the economy will be
in equilibrium state.
TASK B
a)
i) Profit maximise decisions which are linked with legal harvesting
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The harvesting of Mahogany was legal as there were no restrictions on it by the year
2001. This is helpful in increasing their profit shares as they can easily do harvesting of these
tress they can import and export from other countries thus they ware no restriction by
government and they were involved in legal business activities. Thus, there was balance in the
demand and supply in economy.
ii) In the year 1999, government of Brazil cancelled the licences of firms. Thus, the
organisation has adopted another way of harvesting this plant and there were various
illegal practices which were enforced by the corrupt officials. Thus, the firms that were
operating their business activities illegally were not required to follow any law thus they
does not have to pay the tax imposed by government. They were able to gain higher
profits as they were either following rules not paying taxes.
iii) If the government of Brazil enforced laws on the harvesting of Mahogany tree so that
there will be no illegal harvesting in the economy. The cost of operation will be increased
as there are various laws which are imposing by the government so that there demands
will be decreased. There are difference between legal and illegal harvesting like in legal
harvesting license had to be taken form government as a permission to operate its
business activities in legal ways. In illegal harvesting people are operating the business
activities without permission from government and they are not paying taxes or following
any rules (Gantz, 2011).
b)
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i)The depiction of Greenpeace is correct it implies about the structure of the market that the
Mahogany production were supported by the two most powerful players who were supporting at
every points in there business activities. There were successfully exporting the trade of timber
from Para.
ii)
1)
There are various effects on the prices of Mahogany products and they are able to earn
high profits as there is high demands in the economy as people are consuming the products
rapidly. This helps in keeping the economy at equilibrium states where the demands are equal to
supply.
2)
There is great impact of collusions as it affects the health of population by harvesting of
Mahogany tree as they will affect there health because people people are consuming them high
quantity thus they are forcing themselves towards the death zone.
3)
The collusion between the Mahogany kings are defined as the long term strategy because it helps
them in growing there business as they were successfully operating the trade from other
countries like Para which helps them to harvest the production of Mahogany tree. They were
caring out there business activities jointly which helps them in their business (RHeath-Brown,
2015).
TASK C
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a) From the above graph it can be analysed that homicide rates for the Para municipalities from
the year 1995 to 2013 are constantly growing. There was a decline in the year 1994 to 1998 nut
after that the production gradually increased as these business activities were operating illegally
and they does not have to pay taxes or follow any rules and regulations.
b)
Table 1: Difference between average homicide rates, municipalities with and without mahogany,
different periods Period
Areas Areas with
mahogany
Areas without
mahogany
Homicide rate difference between
municipalities
Pre-1999. Pre
major
government
intervention
1999 to 2001.
85% of licenses
revoked
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2001-2008.
Harvesting
banned
Post-2008. The
law is enforced
c) From the above graph it can be identified that Mahogany trees production are constantly
in the economy. The government had taken measures in order to stop there production by
imposing Quotas but than too they are doing the business in illegal ways. Other measures
should be adopted which are helpful in decreasing the demand ratio in the economy so
that there can be equilibrium in the economy (Ratuva, 2014).
TASK D
a)
The lesson which was taught by Brazil to other countries that were aimed at interventions of
Mahogany market are reflect as:
The regulation and taxation act: This act was imposed by government on the production
of Mahogany plants so that there supply in the economy can be regulated so that people will not
force themselves into the well from where person cannot come back he had to loose his life.
Abolition of economic activities: There are various types of economic activities in the
economy which had to be removed so that people who are residing in the economy does not have
to face any problem. If the government will make intervention in the economy than it will affect
there business of tree production (Gantz, 2011).
b)
i)The unregulated marketing are resulting into failures at the market places because it hampers
the image of the market condition and people will not like to buy the products from there which
results in decrease in sales ratios in the economy. People can do much more production of plants
than they are actually needed.
ii)
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1. Opportunity Cost: It is described as an addition cost of producing an extra cost of units in
the economy. Brazil was at times the larger producer but know it had stopped its
production so it results in decrease in profit ratios (Heath, 2015).
2. The danger of spices can be reduced if there is shift in the demand and supply factors in
the economy this can be possible if other substitutes of the same products are available
which people can consume them in relation to the same product.
CONCLUSION
From the above report it can be concluded that production of Mahogany trees were legal
before 1991 but after than government put quotas so that there can be limits on exports of these
products. It helps in bringing the economy at equilibrium stage where the demands will be equal
to the supply factor.
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REFRENCES
Books and Journals
Hood, A. D., 2016. Mahogany: The costs of luxury in Early America by Jennifer L. Anderson.
Journal of Colonialism and Colonial History. 17(3).
Engineer, U., 2012. AraujoAna Lucia, ed. Paths of the Atlantic Slave Trade: Interactions,
Identities, and Images. Amherst, NY: Cambria Press, 2011. xvi+ 456 pp. ISBN:
9781604977479 (hbk.). $129.99. Itinerario. 36(2). pp.167-169.
Oduro, K. A., and et. al., 2011. OE HU DRED YEARS OF FORESTRY I GHA A: A REVIEW
OF POLICY AD REGULATORY DISCOURSES O TIMBER LEGALITY. Ghana J.
Forestry. 27(3). pp.15-32.
Reid, A. and Ryden, D. B., 2013. Sugar, Land Markets and the Williams Thesis: Evidence from
Jamaica's Property Sales, 1750–1810. Slavery & Abolition. 34(3). pp.401-424.
Marañón-Pimental, B., 2012. Forced Labor and Coloniality of Power in Chiapas, Mexico, in the
Nineteenth and Twentieth Centuries. Review (Fernand Braudel Center), pp.211-238.
Rice, A., 2012. The history of the Transatlantic slave trade and heritage from below in action:
Guerrilla memorialisation in the era of Bicentennial commemoration. Heritage from
below, p.209.
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