(1) Suppose that Ralf enjoys collecting morel mushrooms from the forest. The marginal benefit that he...
(1) Suppose that Ralf enjoys collecting morel mushrooms from the forest. The marginal benefit that he receives (in dollar terms) from each additional mushroom can be represented by the function MB = 42 – 4m (where m represents the quantity of mushrooms). Ralf’s marginal cost of collecting mushrooms is given (in dollar terms) by the function MC = 2m.
A.How many morel mushrooms will Ralf optimally collect? In other words, what quantity of mushrooms maximizes Ralf's net benefits? Show your work (2 points)
B.Illustrate the MB and MC functions graphically, labelling all axes and lines. On a separate graph, illustrate Ralf’s total benefit and total cost of collecting mushrooms. On a third graph illustrate Ralf’s net benefits. On each graph, clearly show the optimal quantity. (3 points)
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(1) Suppose that Ralf enjoys collecting morel mushrooms from the forest. The marginal benefit that he...
Suppose that Ralf enjoys collecting morel mushrooms from the forest. The marginal benefit that he receives...
Suppose that Ralf enjoys collecting morel mushrooms from the forest. The marginal benefit that he receives (in dollar terms) from each additional mushroom can be represented by the function MB = 42 – 4m (where m represents the quantity of mushrooms). Ralf’s marginal cost of collecting mushrooms is given (in dollar terms) by the function MC = 2m. How many morel mushrooms will Ralf optimally collect? In other words, what quantity of mushrooms maximizes Ralf's net benefits? Show your work...
(2) Ralf also enjoys fishing. The total benefits (in dollars) he obtains from time spent fishing...
(2) Ralf also enjoys fishing. The total benefits (in dollars) he obtains from time spent fishing are given by TB = 40*ln(h), where ln(.) is the natural log function, and h is hours spent fishing. Because he has to miss work, where he earns a wage of $8 per hour, his marginal cost of time spent fishing is MC = 8. A.Solve for the optimal quantity of hours that Ralf will spend fishing and show your work. Hint: You may...
Ralf enjoys fishing. The total benefits (in dollars) he obtains from time spent fishing are given...
Ralf enjoys fishing. The total benefits (in dollars) he obtains from time spent fishing are given by TB = 40*ln(h), where ln( ) is the natural log function, and h is hours spent fishing. Because he has to miss work, where he earns a wage of $8 per hour, his marginal cost of time spent fishing is MC = 8. Solve for the optimal quantity of hours that Ralf will spend fishing and show your work. Generate a graph in...
Question 2: Working with Marginal Benefits and Costs Suppose the total benefit derived from a continuous...
Question 2: Working with Marginal Benefits and Costs Suppose the total benefit derived from a continuous decisions, Q, is B() 200-202 and the total cost from deciding Q is C(Q)-4Q +20. The marginal benefit (MB) and marginal cost (MC) is the first order derivative of these functions. MB)2040 and MC() 4 +40 (1) (4 points, 2 each) What is the total benefit when Q-2? Q-10? (2) (4 points, 2 each) What is the marginal benefit when Q-2? Q 10? (3)...
Question 2: Working with Marginal Benefits and Costs Suppose the total benefit derived from a continuous...
Question 2: Working with Marginal Benefits and Costs Suppose the total benefit derived from a continuous decisions, Q, ís B(Q) = 200-202 and the total cost from deciding Q is C(O) 4+2Q. The marginal benefit (MB) and marginal cost (MC) is the first order derivative of these functions. MBO) 20-4 and MC(O) 4+40 (1) (4 points, 2 each) What is the total benefit when Q-2? Q-10? (2) (4 points, 2 each) What is the marginal benefit when Q-2? Q-10? (3)...
Suppose the total benefit derived from a continuous decisions, Q, is B(Q) = 20Q − 2Q...
Suppose the total benefit derived from a continuous decisions, Q, is B(Q) = 20Q − 2Q and the 2 total cost from deciding Q is C(Q) = 4Q + 2Q . The marginal benefit (MB) and marginal cost (MC) 2 is the first order derivative of these functions. MB(Q) = 20 − 4Q and MC(Q) = 4 + 4Q . (1) (4 points, 2 each) What is the total benefit when Q=2? Q=10? (2) (4 points, 2 each) What is...
1. Working with Numbers and Graphs Q1 Suppose the marginal costs of reading are constant at...
1. Working with Numbers and Graphs Q1 Suppose the marginal costs of reading are constant at $6 per hour, while the marginal benefits of reading decline (over time) as more reading is performed. In particular, suppose the following table contains the marginal benefit associated with various levels of hours spent reading Time Spent Reading Marginal Benefits (Hours)(Dollars per hour) 10 16 40 Assume the marginal-benefit curve is a straight line through the two points described in the table on the...
1. Individual A and B have the following marginal benefits for private good X: MBA =...
1. Individual A and B have the following marginal benefits for private good X: MBA = 10 - XA MBg = 10 - XB While the cost of producing each unit is 2 dollarsyi.e., MC = 2). You are asked to: a. On a graph, find the market demand function for private good X (hint: make sure to label the angles, elbows, and corners as needed). b. Find the market equilibrium. e. Find consumer A quantity demanded, and consumer B...
(3) A village of 20 people is deciding how much open-space land to acquire. Because of...
(3) A village of 20 people is deciding how much open-space land to acquire. Because of differences in preferences, there are two types of demand functions for open-space land amongst the citizens. In particular, 10 of the people have a demand function given by P = 10 – Q, while the remaining 10 have the demand function P = 8 – 2Q, where Q is quantity of open-space in acres and P is price in dollars. a. Since the open-space...
This problem asks you to analyze environmental quality as a public good, but using a slightly...
This problem asks you to analyze environmental quality as a public good, but using a slightly different approach than was used in the class example. In class we measured environmental quality by the percent abated (20%, 60% etc), this time we will measure environmental quality in terms of the quantity of pollution abated. I ask you to go into some detail about your calculations, to illustrate your understanding intuitively and technically. The Valley of Grimes is inhabited by three people...
Question 2: Working with Marginal Benefits and Costs Suppose the total benefit derived from a continuous decisions, Q, is B() 200-202 and the total cost from deciding Q is C(Q)-4Q +20. The marginal benefit (MB) and marginal cost (MC) is the first order derivative of these functions. MB)2040 and MC() 4 +40 (1) (4 points, 2 each) What is the total benefit when Q-2? Q-10? (2) (4 points, 2 each) What is the marginal benefit when Q-2? Q 10? (3)...
Question 2: Working with Marginal Benefits and Costs Suppose the total benefit derived from a continuous decisions, Q, ís B(Q) = 200-202 and the total cost from deciding Q is C(O) 4+2Q. The marginal benefit (MB) and marginal cost (MC) is the first order derivative of these functions. MBO) 20-4 and MC(O) 4+40 (1) (4 points, 2 each) What is the total benefit when Q-2? Q-10? (2) (4 points, 2 each) What is the marginal benefit when Q-2? Q-10? (3)...
1. Working with Numbers and Graphs Q1 Suppose the marginal costs of reading are constant at $6 per hour, while the marginal benefits of reading decline (over time) as more reading is performed. In particular, suppose the following table contains the marginal benefit associated with various levels of hours spent reading Time Spent Reading Marginal Benefits (Hours)(Dollars per hour) 10 16 40 Assume the marginal-benefit curve is a straight line through the two points described in the table on the...
1. Individual A and B have the following marginal benefits for private good X: MBA = 10 - XA MBg = 10 - XB While the cost of producing each unit is 2 dollarsyi.e., MC = 2). You are asked to: a. On a graph, find the market demand function for private good X (hint: make sure to label the angles, elbows, and corners as needed). b. Find the market equilibrium. e. Find consumer A quantity demanded, and consumer B...
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