EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 9780134516196
Author: BADE
Publisher: PEARSON CO
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Chapter 11, Problem 8IAPA
To determine
To explain the category of good to which the Great Lakes belongs. The goals of the compact and the ways to achieved it.
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Citizens of Veridiania love eating and looking the flowers that grow in the town center. The workers in Veridiania can spend their time planting and tending flowers to enjoy or growing food for consumption. A worker in Veridiana can grow 2 bushels of food in a day or tend 100 flowers. The 15 residents of the city are each willing to forgo the consumption of 1 bushel of food for the enjoyment of 500 extra flowers.
What are the private and public goods in this example?
What is the MRS=MUfood/MUflowers? (How many flowers are they willing to give up to get one more bushel of food?) What is the MRT=MCfood/MCflowers (What is the cost of one bushel of food in terms of flowers given up?
Is this allocation Pareto efficient? Should workers spend more or less time planting flowers? Why?
If this allocation is not P.E., is government intervention necessary? Why or why not?
3. many areas of the country, aquifers (pools of underground water) serve as the primary water source. Water is extracted from the aquifer using wells and is replenished by rain and rivers. In many places the water is being extracted from the aquifers faster than it is being replenished, causing wells to run dry and farmers to have insufficient water for their crops. To address this, farmers in Kansas have all mutually agreed to reduce their usage of water. After reaching this agreement, each farmer must decide whether to follow the agreement.
Assume that if everyone chooses a low level of production, all farmers will have enough water for the entire season. If a farmer chooses a high level of production, they will have more crops to sell but it will reduce the water available (and therefore the crop quality) for all farmers. Specifically, the farmers are faced with the decision shown in the images.
a. If the game is played only one time, characterize each farmer’s best strategy.b.…
. Both Wisconsin and Illinois border Lake Michigan. The lake is becoming polluted and both states are deciding whether or not to clean it. If Wisconsin decides to clean the lake it will cost 1200 and generate social benefits of 1500 – however, Wisconsin will receive only 1100 of those social benefits while neighbor Illinois will receive the other 400. If Illinois cleans the lake, it will cost them 700 and generate social benefits of 900 – however, Illinois will receive only 600 of those benefits, Wisconsin will receive the remaining 300. If a state does not clean the lake, it experiences a cost of $0. If both states clean the lake, the payoffs will be
A. Wisconsin gains 100, Illinois gains 200B. Wisconsin gains 200, Illinois gains 300C. Wisconsin gains 200, Illinois loses 100D. Wisconsin gains 100, Illinois loses 100
Chapter 11 Solutions
EBK FOUNDATIONS OF ECONOMICS
Ch. 11 - Prob. 1SPPACh. 11 - Prob. 2SPPACh. 11 - Prob. 3SPPACh. 11 - Prob. 4SPPACh. 11 - Prob. 5SPPACh. 11 - Prob. 6SPPACh. 11 - Prob. 7SPPACh. 11 - Prob. 8SPPACh. 11 - Prob. 9SPPACh. 11 - Prob. 10SPPA
Ch. 11 - Prob. 1IAPACh. 11 - Prob. 2IAPACh. 11 - Prob. 3IAPACh. 11 - Prob. 4IAPACh. 11 - Prob. 5IAPACh. 11 - Prob. 6IAPACh. 11 - Prob. 7IAPACh. 11 - Prob. 8IAPACh. 11 - Prob. 9IAPACh. 11 - Prob. 1MCQCh. 11 - Prob. 2MCQCh. 11 - Prob. 3MCQCh. 11 - Prob. 4MCQCh. 11 - A renewable common resource is used sustainably if...Ch. 11 - Prob. 6MCQCh. 11 - Prob. 7MCQCh. 11 - When ITQs are assigned, the market price of an ITQ...
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