There is a fish species has a growth function G(S) = gS(1 – ) and a marginal growth function MG(S) = as in the lecture notes. Assume that g = 1, K 2gS g - where all variables are defined K 500. Assume that the price of fish is $30 per fish, the marginal private cost, MPC, to harvest fish is $20. In addition, assume that the discount rate is 10%. The present discount value of the profit from harvesting 225 unit in period O equals - The firm factors in the implications of depleting the stock in period 0 on the harvest in all subsequent periods. 13,750 11,500 12,500 12,750

There is a fish species has a growth function G(S) = gS(1 – ) and a marginal growth function MG(S) = as in the lecture notes. Assume that g = 1, K 2gS g - where all variables are defined K 500. Assume that the price of fish is $30 per fish, the marginal private cost, MPC, to harvest fish is $20. In addition, assume that the discount rate is 10%. The present discount value of the profit from harvesting 225 unit in period O equals - The firm factors in the implications of depleting the stock in period 0 on the harvest in all subsequent periods. 13,750 11,500 12,500 12,750

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A firm maximizes its profit function pL0.5 – wL subject to wL = K where L0,5 is its production function, L is an input (labor), p is the market price, w is the unit cost of the labor L and K is a parameter. Profits are maximized for L K A with the w Lagrange multiplier A = 1 2wL - Using the envelope theorem evaluate the marginal effect of a change of w on the maximal profits assuming: p= 10, w = 1 and K = 100 Answer:
Note: Hand written solution should be avoided.
You manage two chocolate factories. Using only these two factories, you must produce exactly 420 kgs of chocolate daily at lowest possible cost. Mathematically, you have: Q1 = Quantity produced at Chocolate Factory #1 Q2 = Quantity produced at Chocolate Factory #2 Daily total overall production: Q1 – Q2 = 420 At present, each factory produces half the overall requirement. This means that Q1 = 210, Q2 = 210 a) Following your logic , you realize that as long as the marginal cost is different between the two factories, you can lower overall cost while maintaining production at 420 kgs. So, to reduce the overall cost to the lowest possible, you decide to move more than 1 kilogram from one factory to another. As a result, each factory will produce a different quantity of chocolate while the overall daily production remains at 420 kgs. To minimize overall cost, how many kilograms will you order/instruct Factory #1 to produce? Q1 = ____________kgs And how many kilograms would you…
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,
The biological relationship between the growth for the fish population and the size of the fish population is g = 12S(1 - S/4) where g is the growth of the fish population and S is the size of the population. The size of the harvest is a function of the amount of human effort expended b = 3ES where E is the level of effort. Market price of fish per unit is $100 and a constant marginal cost of effort is $40. We can derive the free-access equilibrium effort level Ef by setting the net benefits function equal to zero. Then, E f = in one decimal place. Hint: Write the number
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
None
Asap In a perfectly competitive market, the market price of a toy is $100, with labour costs of $5 and capital costs of $8. The Cobb-Douglas function is below, Q = K0.2L0.5 A ) Find the profit-maximizing quantity Q and its associated profit using the Lagrangian multiplier approach. B) To ensure that the firm maximises profit, how would you develop the objective function, constraint, and Lagrangian?
Recall a sharecropping agreement is where a farmer provides a percentage of their yield to a landowner in exchange for renting the land. Consider the graph below and answer the following questions (include calculations in work): 11 VMPL 10 8 a*VMPL 5 4 3 2 1 10 15 20 25 30 35 40 45 50 55 Labor (Hour) "andıno
The input-output matrix for a simplified economy with just three sectors (natural resources, manufacturing, and trade and services) is given below. Natural Resources Manufacturing Trade and Services 0.1045 0.0428 0.0028 0.0825 0.1086 0.0584 0.0868 0.1019 0.2031 Natural Resources Manufacturing Trade and Services Suppose the demand (in millions of dollars) matrix is the matrix D, shown below. Find the amount each sector should produce. 450 D= 301 126 Production levels of units from natural resources, services are needed. (Round to the nearest whole number as needed.) units from manufacturing, and units from trade and
Consider a Diamond model with no technology growth (g = 0), a Cobb-Douglas production function Y = K (AL)(1-a), and a logarithmic utility function (0 = 1). Suppose the government taxes each young individual an amount T and uses the proceeds to pay benefits to old individuals; thus each old person receives (1 + n)T. Find the Euler equation.
Assume that we have a fixed supply of a depletable resource to allocate between two periods. Assume further that the demand function is constant in the two periods, the marginal willingness to pay is given by the formula P= 18 - 0.3g. and marginal cost is constant at $5 per unit. The total supply is 5 units. What percent of the total should be consumed during the first period if the discount rate is 3%?