4. Consider a community with 80 vacant parcels. The value of developed parcels can be represented by V-80-X, where V is measured in 1000s of $. X represents the number of developed parcels. Each parcel costs 10,000 (C=10) to prepare for development. The social value of undeveloped parcels can be represented by the function U-10+X, where U is also measured in 1000s of $. What is the efficient number of developed parcels? How many parcels will be developed if each parcel is owned by a separate individual, maximizing their own profits?
4. Consider a community with 80 vacant parcels. The value of developed parcels can be represented by V-80-X, where V is measured in 1000s of $. X represents the number of developed parcels. Each parcel costs 10,000 (C=10) to prepare for development. The social value of undeveloped parcels can be represented by the function U-10+X, where U is also measured in 1000s of $. What is the efficient number of developed parcels? How many parcels will be developed if each parcel is owned by a separate individual, maximizing their own profits?
Chapter2: Productions Possibilities, Opportunity Costs, And Economic Growth
Section2.7: Present Investment And The Future Production Possibilities Curve
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Transcribed Image Text:4. Consider a community with 80 vacant parcels. The value of developed parcels can be
represented by V-80-X, where V is measured in 1000s of $. X represents the number of
developed parcels. Each parcel costs 10,000 (C=10) to prepare for development.
The social value of undeveloped parcels can be represented by the function U=10+X, where U
is also measured in 1000s of $.
What is the efficient number of developed parcels?
How many parcels will be developed if each parcel is owned by a separate individual,
maximizing their own profits?
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