Consider a river found in the city of Philadelphia, and then answer the questions that follow. The city has a resort whose visitors use the river for recreation. The city also has a tannery that dumps industrial waste into the river. This pollutes the river and makes it a less desirable vacation destination. That is, the tannery's waste decreases the resort's economic profit. Suppose that the tannery could use a different production method that involves recycling water. This would reduce the pollution in the river to levels safe for recreation, and the resort would no longer be affected. If the tannery uses the recycling method, then the tannery's economic profit is $1,500 per week, and the resort's economic profit is $1,800 per week. If the tannery does not use the recycling method, then the tannery's economic profit is $2,000 per week, and the resort's economic profit is $1,000 per week. These figures are summarized in the following table. Complete the following table by computing the total profit (the tannery's economic profit and the resort's economic profit combined) with and without recycling. Profit Tannery Resort Action (Dollars) (Dollars) No Recycling 2,000 Recycling 1,500 Total (Dollars) 1,000 1,800 Total economic profit is highest when the recycling production method is When the tannery uses the recycling method, the resort earns $1,800-$1,000 = $800 more per week than it does with no recycling. Therefore, the resort should be willing to pay up to $800 per week for the tannery to recycle water. However, the recycling method decreases the tannery's economic profit by $2,000-$1,500 - $500 per week. Therefore, the tannery should be willing to use the recycling method if it is compensated with at least $500 per week. Suppose the resort has the property rights to the river. That is, the resort has the right to a clean (unpolluted) river. In this case, assuming the two firms can bargain at no cost, the tannery will the recycling method and will pay the resort per week. Now, suppose the tannery has the property rights to the river, including the right to pollute it. In this case, assuming the two firms can bargain at no cost, the tannery will the recycling method, and the resort will pay the tannery The resort will make the most economic profit when per week. True or False: The tannery will use the recycling method, regardless of who has the property rights. True False Consider a river found in the city of Philadelphia, and then answer the questions that follow. The city has a resort whose visitors use the river for recreation. The city also has a tannery that dumps industrial waste into the river. This pollutes the river and makes it a less desirable vacation destination. That is, the tannery's waste decreases the resort's economic profit. Suppose that the tannery could use a different production method that involves recycling water. This would reduce the pollution in the river to levels safe for recreation, and the resort would no longer be affected. If the tannery uses the recycling method, then the tannery's economic profit is $1,500 per week, and the resort's economic profit is $1,800 per week. If the tannery does not use the recycling method, then the tannery's economic profit is $2,000 per week, and the resort's economic profit is $1,000 per week. These figures are summarized in the following table. Complete the following table by computing the total profit (the tannery's economic profit and the resort's economic profit combined) with and without recycling. Profit Tannery Resort Action No Recycling Recycling (Dollars) (Dollars) 2,000 1,000 Total (Dollars) 1,500 1,800 Total economic profit is highest when the recycling production method is When the tannery uses the recycling method, the resort earns $1,800-$1,000 = $800 more per week than it does with no recycling. Therefore, the resort should be willing to pay up to $800 per week for the tannery to recycle water. However, the recycling method decreases the tannery's economic profit by $2,000-$1,500 - $500 per week. Therefore, the tannery should be willing to use the recycling method if it is compensated with at least $500 per week. Suppose the resort has the property rights to the river. That is, the resort has the right to a clean (unpolluted) river. In this case, assuming the two firms can bargain at no cost, the tannery will the recycling method and will pay the resort per week. Now, suppose the tannery has the property rights to the river, including the right to pollute it. In this case, assuming the two firms can bargain at no cost, the tannery will the recycling method, and the resort will pay the tannery The resort will make the most economic profit when per week. the tannery has property rights to pollute the river True or False: The tannery will use the recycling met it has property rights to a clean river True False

8. a) Suppose a firm A produces a product q, but also pollution x that affects a second firm B. Firm A is a competitive firm and faces an equilibrium price of £12 for its product. The cost function of firm A is C (q,x) = q² + (x-4)2. Firm B is a competitive firm and faces an equilibrium price of £10. Firm B's cost function is C₂(r,x) = r² + xr. Compute the equilibrium prices and quantities and the profits of the two separate, competitive firms. Interpret the first order conditions. Explain. b) Compute the social optimum, that is, the equilibrium prices, quantities, and profit when firm A and B are merged. Interpret the conditions and compare it to the solution in (a). Explain. c) Devise a quantity tax on product q for firm A in (a) such that the government can restore the social optimum in (b).

Metropolitan Utilities District currently charges residents in Omaha $1.23 per cubic feet of water use for each home's first 900 cubic feet of water used, $1.73 per cubic feet of water use for each home's usage rate between 900 and 3,000 cubic feet, and $2.22 per cubic feet of water use for anything over 3,000 cubic feet of use. The pricing structure is an example of: over-use and inefficient pricing. too few water permits being traded on the local water market. block pricing. conservation pricing.

Question 4 Calculate the equilibrium price for an illegal good that can be harvested for zero cost when competitive sellers face confiscation and a fine of 600 dollars and the probability of arrest is equal to n = 1/6.

The information in the table below shows the demand schedule for water in a certain small town.  Assume the marginal cost of supplying water is constant at $4 per bottle.   Price Quantity (bottles) $9 200 $8 400 $7 600 $6 800 $5 1000 $4 1200 $3 1400 $2 1600   (Note:  You may want to extend this table to generate additional data.  If you do, you need not submit the extended table.)   1. Suppose there is only one supplier of water in this market, what will be its price and quantity for water? (MAKE THE SOLUTIONS READABLE!!!) 2. If there are two suppliers of water in the market (Victor and Sam) and they are able to collude and successfully form a cartel and agree to divide the market evenly, what would be the price of water and what quantity of water will each firm sell? How much profit will each seller earn (show solution)? 3. Suppose the town enacts new antitrust laws that prohibit Victor and Sam from operating as a monopolist.…

A university spent $1.5 million to install solar panels atop a parking garage. These panels will have a capacity of 200 kilowatts (kW) and have a life expectancy of 20 years. Suppose that the discount rate is 10%, that electricity can be purchased at $0.30 per kilowatt-hour (kWh), and that the marginal cost of electricity production using the solar panels is zero. Hint: It may be easier to think of the present value of operating the solar panels for 1 hour per year first. Approximately how many hours per year will the solar panels need to operate to enable this project to break even? 1,468.26 2,936.51 3,230.16 4,111.11 If the solar panels can operate only for 2,643 hours a year at maximum, the project Continue to assume that the solar panels can operate only for 2,643 hours a year at maximum. break even. In order for the project to be worthwhile (1.e., at least break even), the university would need a grant of at least,

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A university spent $1.6 million to install solar panels atop a parking garage. These panels will have a capacity of 700 kilowatts (kW) and have a life expectancy of 20 years. Suppose that the discount rate is 20%, that electricity can be purchased at $0.30 per kilowatt-hour (kWh), and that the marginal cost of electricity production using the solar panels is zero. Hint: It may be easier to think of the present value of operating the solar panels for 1 hour per year first. Approximately how many hours per year will the solar panels need to operate to enable this project to break even? 1,564.62   2,503.39   625.85     If the solar panels can operate only for 1,408 hours a year at maximum, the projectwould   break even.   Continue to assume that the solar panels can operate only for 1,408 hours a year at maximum. In order for the project to be worthwhile (i.e., at least break even), the university would need a grant of at least

the answers shown for the part c are incorrect

******ONLY ANSWER PART 3 IN PICTURE PLEASE**** Demand for Thunder games in Oklahoma City is given by: P(0)=430-20 Seattle does not currently have an NBA team, but they would like to attract the the Thunder. ok ok ok Demand for Thunder games in Seattle is given by: P (Q) = 490 -20 The marginal cost of production in both cities is constant at MC = 70. Suppose that the Thunder faces an extra fixed cost of 10000 in Seattle because they need to build a new stadium if they move. If the Thunder decides to stay in Oklahoma City, they don't need to pay the fixed cost. Cities can still offer bids to attract the team. a) Will the Thunder move to Seattle? b) How much is the winning bid? c) What is the profit plus bid for the Thunder? d) What is the value minus bid for the winning city?