a)Following model was applied to manage a fish stock efficiently in the long run: Harvest function:    H(E) = 80E-2E2    tons per year where E is the number of fishing boats Cost function:          TC = 100E      million $ per year Fish price:                 P = 5        thousand $/ kg [million $ per ton] Given the fishing effort at maximum economic yield (MEY): EMEY = 15, the maximum resource rent (ΠMEY) is…………. million $ per year 1000 1550 2250

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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a)Following model was applied to manage a fish stock efficiently in the long run:

Harvest function:    H(E) = 80E-2E2    tons per year

where E is the number of fishing boats

Cost function:          TC = 100E      million $ per year

Fish price:                 P = 5        thousand $/ kg [million $ per ton]

Given the fishing effort at maximum economic yield (MEY): EMEY = 15, the maximum resource rent (ΠMEY) is…………. million $ per year

  1. 1000
  2. 1550
  3. 2250
  4. 2500

 

b)  Following model was applied to manage a fish stock efficiently in the long run:

Harvest function:    H(E) = 100E-3E2       tons per year

where E is the number of fishing boats

Cost function:          TC = 100E           million $ per year

Fish price:                 P = 10                thousand $ / kg [million $ per ton]

The fishing effort at maximum economic yield (MEY): EMEY =……..   boats

  1. 10
  2. 15
  3. 20
  4. 30.
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