Sub : EconomicsPls answer very fast.I ll upvote correct answer. Thank You 7. Best responses and the tragedy of the commonsAa AaAlex and Mitch are two farmers who grow vegetables on common land. Each farmer gets a benefit from the seedsthat he plants, but the overall size and quality of the individual vegetables decreases as the number of seeds plantedincreases (since each vegetable has less room to grow and gets a smaller share of nutrients from the soil). If SArepresents the total number of seeds planted by Alex and SM is the total number planted by Mitch, then the totalbenefit to Alex will be as follows: SA(60 - SA - SM), or (SA60 - SA² SMSA). The marginal benefit to Alex from plantingadditional seeds is, therefore, equal to (60 - 2SA - SM). Assuming the marginal cost of planting is zero, thebest-response function that gives the optimal number of seeds Alex should plant, as a function of the number ofseeds Mitch chooses to plant, is represented byUse the blue line (circle symbols) to plot Alex's best response function (BRF) on the following graph, with the totalnumber of seeds he plants on the vertical axis as a function of the total number Mitch plants (horizontal axis).Then, use the orange line (square symbols) to plot Mitch's best-response function (assuming his total benefit is givenby SM(60 - SM - SA), and thus he responds to Alex in the same way Alex responds to him), with the total number heplants (horizontal axis) as a function of the total number Alex plants (vertical axis).Finally, place the black point (X symbol) on the graph to indicate the Nash equilibrium number each plants, given theother's equilibrium choice. Dashed drop lines will automatically extend to both axes. SEEDS PLANTED BY ALEX100806040200204010080SEEDS PLANTED BY MITCH60Alex's BRFo-Mitch's BRFNash Eq. QuantityAlex's BRF 2Help Clear AllWhen each farmer plants the equilibrium number of seeds, each farmer gets a benefit ofeach farmer plants 15 seeds, each farmer will get a benefit of. If, instead,Suppose Alex discovers a new method of fertilizing his seeds, such that his best-response function is now given by SA= 40 - 0.5(SM). Use the green line (triangle symbols) to plot Alex's new best-response function after this change onthe original graph.As a result of this change, the optimal number of seeds for Alex to plantquantity for Mitch to plantand the optimal

The tragedy of the commons is a concept in game theory and economics that describes a situation…

SEEDS PLANTED BY ALEX 100 80 60 40 20 0 20 40 60 80 SEEDS PLANTED BY MITCH 100 O Alex's BRF O- Mitch's BRF Nash Eq. Quantity --X I Alex's BRF 2 Help Clear All When each farmer plants the equilibrium number of seeds, each farmer gets a benefit of each farmer plants 15 seeds, each farmer will get a benefit of If, instead, Suppose Alex discovers a new method of fertilizing his seeds, such that his best-response function is now given by SA = 40 - 0.5(SM). Use the green line (triangle symbols) to plot Alex's new best-response function after this change on the original graph. As a result of this change, the optimal number of seeds for Alex to plant quantity for Mitch to plant and the optimal

SEEDS PLANTED BY ALEX 100 80 60 40 20 0 20 40 60 80 SEEDS PLANTED BY MITCH 100 O Alex's BRF O- Mitch's BRF Nash Eq. Quantity --X I Alex's BRF 2 Help Clear All When each farmer plants the equilibrium number of seeds, each farmer gets a benefit of each farmer plants 15 seeds, each farmer will get a benefit of If, instead, Suppose Alex discovers a new method of fertilizing his seeds, such that his best-response function is now given by SA = 40 - 0.5(SM). Use the green line (triangle symbols) to plot Alex's new best-response function after this change on the original graph. As a result of this change, the optimal number of seeds for Alex to plant quantity for Mitch to plant and the optimal

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter12: Environmental Protection And Negative Externalities

Section: Chapter Questions

Problem 10SCQ: Suppose a city releases 16 million gallons of raw sewage into a nearby lake. Table 12.8 shows the...

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Consider two approaches to reducing emissions of CO2 into the environment from manufacturing industries in the United States. In the first approach, the U.S. government makes it a policy to use only predetermined technologies. In the second approach, the U.S. government determines which technologies are cleaner and subsidizes their use. Of the two approaches, which is the command-and-control policy?
In what ways (it) company investments in research and development create positive externalities?
A country called Sherwood is very heavily covered with a forest of 50,000 trees. There are proposals to clear some of Sherwoods forest and grow com, but obtaining this additional economic output will have an environmental cost from reducing the number of trees. Table 12.11 shows possible combinations of economic output and environmental protection. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the number of trees, and the quantity of economic output, measured in corn, on the vertical axis. Which choices display productive efficiency? How can you tell? Which choices show allocative efficiency? How can you tell? In the choice between T and R, decide which one is better. Why? In the choice between T and S, can you say which one is better, and why? If you had to guess, which choice would you think is more likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice Q or S? Why?
In the Land of Purity, there is only one form of pollution, called gunk. Table 12.14 shows possible combinations of economic output and reduction of gunk, depending on what kinds of environmental regulations you choose. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the percentage reduction of gunk, and with the quantity of economic output on the vertical axis. Which choices display productive efficiency? How can you tell? Which choices show allocative efficiency? How can you tell? In the choice between K and L, can you say which one is better and why? In the choice between K. and N, can you say which one is better, and why? If you had to guess, which choice would you think is move likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice L or M? Why?
Radio stations, tornado sirens, light houses, and street lights are all public goods in that all are nonrivalrous and nonexclusionary. Therefore why does the government provide tornado sirens, street lights and light houses but not radio stations (other than PBS stations)?
The chapter defines private enterprise as a characteristic of market-oriented economies. What would public enterprise be? Hint: It is a characteristic of command economies.
Consider the case of global environmental problems that spill across international borders as a prisoners dilemma of the sort studied in Monopolistic Competition and Oligopoly. Say that there are two countries, A and B. Each country can cheese whether to protect the environment, at a cost of 10, or not to protect it, at a cost of zero. If one country decides to protect the environment, there is a benefit of 16, but the benefit is divided equally between the two countries. If both countries decide to protect the environment, there is a benefit of 32, which is divided equally between the two centuries. In Table 12.10, fill in the costs, benefits, and total payoffs to the countries of the following decisions. Explain why, without some international agreement, they are likely to end up with neither country acting to protect the environment.
The three residents of Smallville are consideringa fireworks display. Clark values this public goodat $80; Lana at $50; and Pete (who dislikesfireworks) at −$30. Fireworks cost the town $120,or $40 per person. The efficient outcome is for thetowna. to provide the public good because the medianperson values it more than its cost per person.b. to provide the public good because a majorityof the residents value it more than its cost perperson.c. to provide the public good because the total valueof a majority exceeds the total cost.d. not to provide the public good because the totalvalue of all residents is less than the total cost.
1.Use the marginal analysis technique to determine the quantity of organic coconut oil that will maximize net benefits. Present results in table form and highlight the maximizinglevel. 2. Graphically illustrate letter B. Separate the graphs for TB – TC approach, MB = MC rule, and net benefit (maximum). The sequence of the graph: (1) TB – TC approach (topmost graph); (2) net benefit (middle graph); and (3) MB, MC, & MNB (last, 3rd graph). But be sure that the graphs are parallel in X-axis so as to be consistent in the results. (Label your graphs accordingly and appropriately.)
5) Suppose that an international agreement requires exporters to reduce their carbon emissions. In this context, government subsidies are provided to R&Ds that will enable green-friendly production in exporting industries that produce high-tech.a) Explain what might be the reasons for the implementation of such an activist policy.(Answer this question with the arguments of your main course book, (Krugman; Obstfeld; Melitz; 2015))b) Describe how the Environmental Kuznet curve works. Let's assume that there is a green-friendly technology transfer from developed countries to less developed countries in order to achieve the goal of a decrease in emission, then what will happen to the curve?
11 When performing a benefit cost analysis of different options to provide clean water to a community, the option that should be chosen is the option that maximizes the benefit to cost ratio. True or False?
(1) Define the tragedy of the commons in your own words. (2) Why are fish in the ocean an example of a resource that suffers from the tragedy of the commons but cattle grazing in a farmer’s pasture does not suffer from the tragedy of the commons?