Melanie and Oli are competing Pacific halibut fishers. Both have been allocated ITQs that limit their catch to 1,000 tons of Pacific halibut each. Melanie's cost per ton is $20; Oli's cost per ton is $25. If the market price of Pacific halibut is $35 per ton, what is the maximum amount Melanie would be willing to pay per ton for Oli's ITQs? Multiple Choice $15. $10. $35. $25.
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Melanie and Oli are competing Pacific halibut fishers. Both have been allocated ITQs that limit their catch to 1,000 tons of Pacific halibut each. Melanie's cost per ton is $20; Oli's cost per ton is $25. If the market
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- Melanie and Oli are competing Pacific halibut fishers. Both have been allocated ITQs that limit their catch to 1,000 tons of Pacific halibut each. Melanie's cost per ton is $36; Oli's cost per ton is $40. If the market price of Pacific halibut is $48 per ton, what is the minimum amount per ton that Melanie would have to offer Oli to convince him to sell Melanie his ITQs? Multiple Choice $6. $8. $12. $4.Kara and Kyle are competing sockeye salmon fishers. Both have been allocated ITQs that limit their catch to 2,000 tons of sockeye salmon each. Kara's cost per ton is $8; Kyle's cost per ton is $12. If the market price of sockeye salmon is $15 per ton, and Kara and Kyle both catch their quota, their combined profit will be Multiple Choice $20,000. $14,000. $30,000. $6,000.Splitting Pizza: You and a friend are in an Italian restaurant, and the owner offers both of you a free eight-slice pizza under the following condition. Each of you must simultaneously announce how many slices you would like; that is, each player i ∈ 1, 2 names his desired amount of pizza, 0 ≤ si ≤ 8. If s1 + s2 ≤ 8 then the players get their demands (and the owner eats any leftover slices). If s1 + s2 > 8, then the players get nothing. Assume that you each care only about how much pizza you individually consume, and the more the better.What outcomes can be supported as pure-strategy Nash equilibria?
- If there is only one buyer and one seller meeting to exchange, then any price that they agree upon must be between the willingness to pay of the buyer and the willingness to sell of the seller.True or FalseTwo hunters may choose, individually and simultaneously, to go deer hunting, as the deer can provide abundant and appetizing food, or to go hare hunting, also appetizing, but scarce. Deer hunting represents a challenge and requires mutual coordination. Hunting a deer without cooperation means that the deer will be safe; while hunting a deer in groups guarantees it will be caught. Hare hunting is an individual activity that does not require another hunter, and the one who decides to go hare hunting always makes it. The reward for hunting a hare is 1, while the reward for each of the hunters for catching a deer together is 3 for each one. The reward for not hunting a deer is 0. Specify the game in a normal way arising from this situation. Do the players have strictly dominated strategies? Determine the set of rationalizable strategies in this case. Find all Nash equilibriums in this case, if any. Are they efficient in Pareto sense? Justify your answer.A Gain from Trade occurs when a unit is sold for a price greater than the unit of the good is worth to a seller and, simultaneously, bought for a price less than the good is worth to a buyer. Consider the first 2 units of the good that would be sold in this market (the vertical red line on the graph). Which answer choices are correct? If Kai and Mint sold one unit each to Gob and Yam at a price of $6, the trade would be mutually beneficial. At a price of $6, Gob would benefit by $3 because she is paying $6 for a unit of the good which is worth $9 to her. At a price of $6, Kai would benefit by $4 because she is getting $6 for a unit of the good which is worth $2 to her. For the first 2 units of the good there is potential gain from trade of $7 for each of the 2 units. For the first 2 units of the good sold the difference between the value to buyer and seller is $9 each. This means there is a potential gain from trade of $9 per unit. If the first 2 units of the…
- two timber companies, Alpha and Beta, have to decide whether to harvest timber from the North Hill or the South Hill and then sell the timbers in the same market. If both harvest from North Hill, each company can harvest 100 tons of timber. If both companies harvest from South Hill, each company can harvest 150 tons of timber. If one company harvests from North Hill and the other harvests from South Hill, the company at North Hill can harvest 150 tons of timber while the company at South Hill can harvest 250 tons of timber. The price of timber is dependent on the total supply of timber in the market. The price will be $180 per ton if the total supply is 200 tons, $150 per ton if the total supply is 300 tons and $100 per ton if the total supply is 400 tons. To both companies, the cost of harvesting in North Hill is $5,000 and the cost of harvesting in South Hill is $10,000. (a) If Alpha and Beta were to make a decision simultaneously, construct the payoff matrix in terms of profit for…Suppose Kenji is willing to pay a total of $180,000 for an antique car. True or False: Keeping his maximum willingness to pay for an antique car in mind, Kenji will buy the antique car because it would be worth more to him than its market price of $225,000. True FalseMelanie and Oli are competing Pacific halibut fishers. Both have been allocated ITQs that limit their catch to 1,000 tons of Pacific halibut each. Melanie's cost per ton is $20; Oli's cost per ton is $28.Refer to the information given and assume that the market price of Pacific halibut is $40 per ton. If Melanie pays Oli $10 per ton for his ITQs and then catches her new limit of 2,000 tons, their combined profit would be: $28,000. $32,000. $40,000. $54,000.
- Suppose an emissions standard is implemented that required each plant to reduce its pollution by 5,000 tons. What will be the Total Cost of Pollution Reduction for the entire industry? Suppose instead of an emissions standard, the government implements a tradeable permit system. Each firm is now given 3,000 permit each (1 permit equals 1 ton of pollution allowed). How many permits will be traded between the 2 firms? (Hint: The total amount that need to be reduced is 10,000 tons. i.e. Q1 + Q2 = 10,000)There are six farmers in Great Britain with access to government land to graze their cows for free. They all must share the land. Each farmer has an individual incentive to put as many of his or her cows on the land to increase their profits but each additional cow depletes the resources for all six farmers and if the farmers put too many cows on the pasture, the grass will be depleted and all the cows will starve. The grass is a limited resource. What strategy do you propose to the farmers?Jill and Jack both have two pails that can be used to carry water down from a hill. Each makes only one trip down the hill, and each pail of water can be sold for $4. Carrying the pails of water down requires considerable effort. Both Jill and Jack would be willing to pay $2 each to avoid carrying one pail down the hill, and an additional $3 to avoid carrying a second pail down the hill.a. If Jack and Jill each must decide whether to carry one or two pails of water down from the top of the hill, how many pails will each child choose to carry? ___ pail(s)b. Jill and Jack’s parents are worried that the two children don’t cooperate enough with one another. Suppose they make Jill and Jack share equally their revenues from selling the water. Given that both are self-interested, construct the payoff matrix for the decisions Jill and Jack face regarding the number of pails of water each should carry. Carry 1 pail Jack Carry 2 pails…