ARE 1110 Lecture Notes - Lecture 12: Overgrazing
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This business decision looks at the impact an externality has on an Investment Choice.
A dynamic externality occurs when (as a group) our animals impose a cost on the future provision of the good produced in the commons, which are; we can cause environmental damage through overgrazing.
There is one pasture we share in commonâthere are just the two of us using the pasture.
On this pasture, milk production as a function of total herd size is as follows:
# of animals | Liters of milk produced |
0 | 0 |
5 | 10 |
10 | 20 |
15 | 30 |
20 | 36 |
25 | 40 |
30 | 44 |
As you can see, the amount of milk produced increases with the size of the herdâhowever, it increases at a decreasing rate.
For each livestock owner, the share of this total milk produced they receive is a function of your share of the total herd. The Price of milk is $1 per liter.
For each animal put on the pasture, it costs $1 in private labor costs. (5 animals costs $5, 10 animals costs $10,â¦)
So if I have 5 animals and you have 5 animals, my payoff is (5/10)*20-5, or 5. If you had 15 animals and I had 5, then it is (5/20)*36-5, or 4.
A) given no market intervention, what is the Nash Equilibrium of # of animals and Liters of milk if there are two farmers?
B) What is the Pareto Optimal Equilibrium?
C) What would each investor need to do to create the Optimal Equilibrium? Show your work on all answers!
D) This is an arithmetic questionâit does not require extremely high level math. If the government wished to maximize its tax revenue on Milk, how much would it charge given the information provided in the introduction (noteâyou will create a new equilibrium)?
9.
value:
10.00 points
A population consists of the following five values: 9, 11, 12, 14, and 18. |
a. | List all samples of size 3, and compute the mean of each sample. (Round your mean value to 2 decimal places.) |
Sample | Values Sum Mean | ||
1 | (Click to select)9, 11, 129, 12, 149, 12, 189, 14, 18 | ||
2 | (Click to select)9, 11, 149, 11, 129, 11, 189, 12, 14 | ||
3 | (Click to select)9, 11, 189, 11, 129, 11, 149, 12, 14 | ||
4 | (Click to select)9, 12, 1411, 12, 149, 11, 1411, 14, 18 | ||
5 | (Click to select)9, 12, 189, 11, 129, 11, 149, 11, 18 | ||
6 | (Click to select)9, 14, 189, 11, 129, 11, 149, 11, 18 | ||
7 | (Click to select)11, 12, 149, 11, 1211, 9, 149, 11, 18 | ||
8 | (Click to select)11, 12, 1811, 12, 1411, 12, 911, 9, 12 | ||
9 | (Click to select)11, 14, 1811, 14, 1211, 9, 1411, 9, 12 | ||
10 | (Click to select)12, 14, 1812, 14, 912, 14, 1112, 9, 14 | ||
For the question above please give me the Sum , Mean for each row starting with 1 through 10. ____ ______ |
b. | Compute the mean of the distribution of sample means and the population mean. (Round your answers to 2 decimal places.) |
Sample means________ | |
Population mean_______ | |