FACULTY OF AGRICULTURE AND FORESTRY

FDM 2311
FOREST ECONOMICS
TUTORIAL 1: FOREST ECONOMICS AND SOLUTION

LECTURER: DR. SUZIANA BINTI HASSAN

GROUP 3

NAMA NO MATRIK

SYVESTER ANDI ANAK JEKI S30566

ASHLEY SARAH A/P RAMACHANDRAM S30248

DANIEL THIEN SWEE SING S30530

NURUL AIN FITRI BINTI ZAINUH S30651

NUR SHAHIRA BINTI ABU BAKAR S30589

QUESTION:

Objectives:
Solve the economics problem such as limited resources and the important in choosing the
best.

Task A: Provide a short explanation based on the questions below:

Any economic system will have to answer the following questions:

1. What to produce, given resources are limited (so we cannot produce everything we want)

Timber is one of the limited natural resource products that can help to increase
the country's economy. Through timber, many products can be produced such as
furniture. A great example of furniture is beds, chairs, boxes, stools and chests. The
furniture products can be marketed domestically or internationally. Since timber is a
limited resource, we need to choose the tree carefully for the outcomes so it does
not affect the environment and also we can provide timber in a long period of time.
Furniture made of wood is strong, long-lasting and requires minimal maintenance, as
compared to other materials. All different types of wood have unique signature marks
that can help in easy identification of the type. Both hardwoods and softwoods
timbers are used in furniture manufacturing, and each has its own specific uses.
Common softwoods used include pine, redwood and yew. Higher quality furniture
tends to be made out of hardwood, including oak, maple, mahogany, teak, walnut,
cherry and birch. The highest quality wood will have been air dried to rid it of its
moisture.

2. How to produce the goods and services that we decide to produce in #1?

As we know, lumber has one factory we call lumber drying mills, an industry that
turns timber into manufactured wood into a good product which goes through some
transformation process. We call the process the wood manufacturing transformation
process which is firstly about the head rig. The primary chain saw cuts the tree or
timber into sewn pieces. Then edging is removing the irregular edges and defects
from the swan pieces. After that we do trimming, we trimmer it to square off at the
end of lumber or timber into uniform pieces based on market demand and
dimensions. About rough lumber sorting, the pieces that are segregated based on
the demand and dimension on final product production like unseasoned, which is
known as green season or dry season. After that, we sticker it together. The lumber
and timber destined for the dry process are stacked with spacers that allow some air
to circulate within the stack. Next one we dry the lumber because the lumber is kiln-
dried. The lumber drying process originally required the mills to depend on proper
wood moisture of management procedures. However, many consumers were
mistaken to believe that wood MC concern would end when the wood was shipped
out from the country. MC technology is a vital component of the modern lumber
drying manufacturing. The expert technicians monitoring those moisture
management systems. Lastly, we plan and smooth the surface of each piece of
lumber and make the width and thickness uniform.
3. For whom is this stuff produced?

The basic idea of furniture is that it is considered to be the centrepiece of any

establishment, like a house, office or business space, therefore the furniture that is
made from timber is highly produced to be used in homes, offices, restaurants and
hotels. In a broad sense, furniture refers to movable objects that support various
human activities such as seating, eating, sleeping, holding objects at a convenient
height and store items such as shelves and cupboards. In a contemporary workplace
setting, the furniture plays an important role in the ambience of the workplace, giving
a safe and relaxing atmosphere and a comfortable feeling to all the occupants of the
office. In homes, furniture adds authenticity. New furniture such as tables or even
some lamps and lampstands can add either an authentic look or be authentically
crafted even.

4. Who gets to decide #1-3? (An authority/decision maker)

Malaysia has begun implementing the Peninsular Malaysia Timber Legality

Assurance Scheme [MYTLAS (Peninsular Malaysia)] and the Sabah Timber Legality
Assurance Scheme (Sabah TLAS) to ensure the legality of its timber and timber
products exported to the EU. Likewise, Sarawak has implemented the Sarawak
Timber Legality Verification System (STLVS) to improve the traceability of its legal
timber production supply chain. Malaysia actively participates in multiple global
forums, including the FAO, the ITTO, the UN Forum on Forests, and the Convention
on International Trade in Endangered Species (CITES), to publicise not only
Malaysian interests, as well as the interests of other tropical timber-producing
countries.
Task B:
QUESTION 1:
A Model of Scarcity and Choice: The Production Possibilities Curve

We can illustrate choices and opportunity costs through constructing a production

possibilities curve for two hypothetical goods. Suppose the Sarawak is making a decision
about allocating resources. Let's assume they must choose between producing two goods:
Sawn timber and a plywood. Given that their resources are scarce, they must choose how to
allocate them between sawn timber and plywood. Suppose the tradeoff between sawn timber
and plywood per month is given by the table below:

Table 1: Production Quantity of Sawn Timber and Plywood in Sarawak

Sawn Timber Plywood
Jan 400 0
Feb 300 350
Mac 200 650
Apr 100 850
May 0 1000
Based on your understanding, please discuss Table 1 in terms of Opportunity cost.

(ANSWER):

Table 1

1) January: The opportunity cost of 400 sawn timber is 0 plywood in January; The
opportunity cost of 0 plywood is 400 sawn timber in January.

2) February: The opportunity cost of 300 sawn timber is 350 plywood in February; The
opportunity cost of 350 plywood is 300 sawn timber in February.

3) March: The opportunity cost of 200 sawn timber is 650 plywood in March; The opportunity
cost of 650 plywood is 200 sawn timber in Mac.

4) April: The opportunity cost of 100 sawn timber is 850 plywood in April; The opportunity
cost of 850 plywood is 100 sawn timber in April

5) May : The opportunity cost of 0 sawn timber is 1000 plywood in May; The opportunity
cost of 1000 plywood is 0 sawn timber in May.
QUESTION 2:

Sawn Timber vs. Plywood

450
A
400
350
B
300
Sawn Timber

250
C
200
150
D
100
50
E
0
0 200 400 600 800 1000 1200
Plywood

Figure 1 : The Production Possibilities Curve of normal tradeoff between Sawn Timber and
Plywood

Sawn Timber vs. Plywood

450 Z
A
400
350
B
300
X
Sawn Timber

250
C
200
150
D
100
50
E
0
0 200 400 600 800 1000 1200
Plywood

Figure 2 : The Production Possibilities Curve of achievable tradeoff between Sawn Timber
and Plywood.

Explain Figure 1 and Figure 2 above based on the INFORMATION statement provided. In
your opinion, what is Z? Please discuss the possibilities of Z and its condition.
ANSWER:

From diagram 1 it proves that the increment of the sawn timber causes the
decrement of the plywood that can be produced. For example, in January the
opportunity cost of 400 sawn timber is 0 plywood; The opportunity cost of 0 plywood
is 400 sawn timber. From my observation the sawn timber can make less quantity of
timber than plywood.

From diagram 2 Z is a prediction or possibility curve that when sawn timber reaches
500 the opportunity cost for plywood is 1200. The conclusion is the opportunity cost
for 500 sawn timber is 1200 of plywood; the opportunity cost of 1200 plywood is 500
of sawn timber. At the same time, the more quantity of sawn wood causes less of the
quantity of plywood. The result will make the curve more curvier. For example due to
limited resources the quantity of sawn wood is 0 meanwhile plywood is 1000. This is
proof that even though they have faced limited resources plywood still can produce
can wood.

In conclusion, plywood is a better choice rather than sawn wood. This is because
more plywood can be produced due to limited resources than sawn wood. As we can
see from the graph the quantity of plywood is more than sawn wood that is produced
by months.
References:
1. Washington DC Web Design Company, D. W. D. (2019). Wood Products.

Www.afandpa.org. https://www.afandpa.org/our-products/wood-products

2. Canada, G. (2020, July 6). Wood products: Everywhere for everyone | Natural

Resources Canada. Nrcan.gc.ca. https://www.nrcan.gc.ca/our-natural-

resources/forests-forestry/forest-industry-trade/forest-products-applications/non-

timber-forest-products/wood-products-everywhere-everyone/13313

3. Smith, R. (2012, December 21). What Is the Wood Manufacturing Transformation

Process? Wagner Meters; Wagner Meters. https://www.wagnermeters.com/forest-

products/industry-info/wood-manufacturing-processes/

4. Malaysian Timber Council. “Malaysian Timber Council.” Mtc.com.my, 2011,

mtc.com.my/resources-InternationalTradeRequirements.php. Accessed 18 Aug. 2021.