EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 8220103632225
Author: PARKIN
Publisher: PEARSON
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Chapter 11, Problem 9IAPA
To determine
To explain:
The way the Pacific islands' action influences the efficiency of use of Tuna resources.
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Table 2
Imagine a small town in which only two residents, Lisa and Mark, own wells th Time left 1:57
drinking water. Each week Lisa and Mark work together to decide how many gallons of
water to pump. They bring the water to town and sell it at whatever price the market will
bear. To keep things simple, suppose that Lisa and Mark can pump as much water as they
want without cost so that the marginal cost of water equals zero. The weekly town demand
schedule and total revenue schedule for water is shown in the table below:
Quantity
(in gallons)
0
100
200
300
400
500
600
700
800
900
1,000
1,100
1,200
Price
Select one:
O a. 0
O b. 1,200
O c. 600
O d.
900
$120
110
100
90
80
70
60
50
40
30
20
10
0
Total Revenue
(and Total Profit)
$0
11,000
20,000
27,000
32,000
35,000
36,000
35,000
32,000
27,000
20,000
11,000
0
Refer to Table 2. If the market for water were perfectly competitive instead of monopolistic,
how many gallo of water would be produced and sold?
Figure: PPV
Price.
Costs, $100
Marginal 901
Revenue
80
70
60
50
40
30
20
10
0
MR
Quantity
(number of subscriptions)
(Ref 28-1 Figure: PPV) Use Figure 28-1: PPV. The figure shows the demand and marginal revenue for a pay-per-view football game on
cable TV. Assume that the marginal cost and average cost are a constant $20. If the cable company is a monopoly, how much will it
produce?
a.8
b.4
c.6
d.2
A large share of the world supply of cocoa beans comes from Ghana and Ivory Coast.
Suppose that the marginal cost of producing cocoa beans is constant at GHC1000 per
bag and the demand for cocoa beans is described by the following schedule.
Price (GHC) Quantity (bags)
5000
6000
7000
8000
9000
10000
11000
12000
8000
7000
6000
5000
4000
3000
2000
1000
a) If there were many suppliers of cocoa beans, what would be the price and quantity?
b) If there were only one supplier of cocoa, what would be the price and quantity?
c) At a meeting in October 2017 in Accra, the leaders of the two leading producers of
cocoa beans discussed the possibility of cooperating to boost the price of cocoa. If
Ghana and Ivory Coast formed a cartel, what would be the price and quantity? If the
countries split the market evenly, what would be Ghana's production and profit?
f) What would happen to Ghana's profit if it increased its production by 1000 cocoa
while Ivory Coast stuck to the cartel agreement?
g) Use your…
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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