CHAPTER II
 THEORETICAL FOUNDATIONS


 The analysis of fishery production has led to the development of a

conceptual framework known as the bioeconomic theory of the fishery.

The term bioeconomics as used here refers to the theoretical integration

of biological and economic theory. Under this general definition, there

are several variations of theoretical models describing fishery

production. The main thrust of bioeconomics has been to create a

conceptual framework that enables the determination of economically

efficient input levels at the firm and/or industry level while simul-

taneously maintaining the underlying resource at some fixed level.

 The first section of this chapter discusses the biological bases of

bioeconomic models. Specifically, the notion of sustainable yield will

be developed and some of the main stock production models will be

presented. Section two builds upon the technical biological relation-

ships by introducing prices and concepts dealing with economic effi-

ciency in production. Included in this section is a review of several

specific bioeconomic models of fishery production. The final section of

this chapter extends these basic bioeconomic models by presenting a

theoretical bioeconomic model of a multi-sector fishery with variable

product price and pecuniary externalities.


 Industry here refers to the aggregate of all vessels operating in
 a given fishery.