13.6 A beekeeper and a farmer with an apple orchard are neighbours. This proximity isconvenient for the orchard owner because the bees pollinate the apple trees: one beehive pol-linates one acre of orchard. Unfortunately, there are not enough bees next door to pollinatethe whole orchard. Commercial pollination services cost $10/acre. The beekeeper has totalcosts TCH2 + 10H + 10 where H is the number of hives. Each hive yields $20 worth ofhoney.a. How many hives would the beekeeper maintain if operating independently of the farmer?What is the value of the positive externality provided by the beekeeper to the farmer?b. What is the socially efficient number of hives?c. In the absence of transaction costs, what outcome do you expect will arise from bargainingbetween the beekeeper and the farmer?d. How high would total transaction costs need to be to erase all gains from bargaining?

a. How many hives would the beekeeper maintain if operating independently of the farmer? What is the…

Answered: 13.6 A beekeeper and a farmer with an…

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 43P: A city currently emits 15 million gallons (MG) of raw sewage into a lake that is beside the city....

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EOC 11.04 Two businesses, X and Y, each dump 20 tonnes of pollution into a creek. In an effort to reduce pollution, the government will now require businesses to have a pollution permit to dump pollutants in the creek. Each business receives 10 pollution permits and they can use it to pollute or sell it to the other business (but lose the ability to pollute). To reduce pollution it costs business X $100 per tonne of pollutant eliminated and it costs business Y $50 per tonne of pollutant eliminated. Once the two businesses have traded these permits with each other, what is the likely outcome? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a business X emits 10 tonnes of pollutants and business Y emits 10 tonnes of pollutants. b business X no longer pollutes, and business Y will not lower the amount it pollutes. business X raises its pollution, and business Y will lower how much it pollutes. business Y no longer pollutes, and…
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- A group of four players i = 1, 2, 3, 4 are involved in a joint project. Each player chooses effort level a,, which represents her contribution to the project. This effort must be between zero and 1:0 a 1. The outcome of the project is 4(a₁ + a2 + a3 + a4). Players divide the outcome equally amongst themselves. Each player incurs a cost c(a) = a?. a) The contributions a₁ = d₂ = a3 = a4 = 1 constitute a Nash Equilibrium. b) The contributions a₁ = 2 = a3 = a4 = ½ constitute a Nash Equilibrium. c) The contributions a₁ = a2 = a3 = a4 = 0 constitute a Nash Equilibrium. O ◆
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Suppose that there are customers distributed evenly across a line which runs from 0 to 1. There are two competing vendors that choose where on the line to locate. Customers buy from whichever vendor is closest to their location. If the first vendor is located at 1/3, what is the best response for the second vendor? A B C 2/3 1/2 Slightly to the left of 1/3 D Slightly to the right of 1/3
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Completed 17 out of 20 estion 14 of 20 > A network externality is an external cost or benefit generated from the O virtuous cycle. O production of a network good. consumption of a network good. O network effect. LAPTOP LOGIN cen PASSWORD: Browarg USERNAME: student
The Filthy Chemical Company dumps 100 tons of pollutants every year in the Pristine Lake. The Trout Fishing Co., the only other user of the lake,estimates that if Q tons of pollution were cleaned up every year its profits would rise according to the relation Filthy estimates it can clean the pollutants at constant average costs of $2 per ton. (a) In the interest of efficiency, how much pollution should be cleaned up every year? (b) Suppose Filthy bought Trout. How much would it clean up? What if Trout bought Filthy?

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