An airport is located next to a banana farm. The airport can fly X planes per day, but the burning fuel will cause air pollution in the amount of Y per day, where Y can be any positive number. The total profits for the airport per day are given by 50X − X2 + (9 − 2Y ) 2 . The banana farm needs clean air to produce bananas, B, so the air pollution caused by the airport makes growing bananas more costly. The banana farm’s profit function is 20B − B2 − (5 + Y ) 2 . What is the socially optimal level of air pollution? (a) 7 (b) 9/2 (c) As much as possible (d) 23/3 (e) 4
An airport is located next to a banana farm. The airport can fly X planes per day, but the burning fuel will cause air pollution in the amount of Y per day, where Y can be any positive number. The total profits for the airport per day are given by 50X − X2 + (9 − 2Y ) 2 . The banana farm needs clean air to produce bananas, B, so the air pollution caused by the airport makes growing bananas more costly. The banana farm’s profit function is 20B − B2 − (5 + Y ) 2 . What is the socially optimal level of air pollution? (a) 7 (b) 9/2 (c) As much as possible (d) 23/3 (e) 4
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
An airport is located next to a banana farm. The airport can fly X planes per day, but the burning fuel will cause air pollution in the amount of Y per day, where Y can be any positive number. The total profits for the airport per day are given by 50X − X2 + (9 − 2Y ) 2 . The banana farm needs clean air to produce bananas, B, so the air pollution caused by the airport makes growing bananas more costly. The banana farm’s profit function is 20B − B2 − (5 + Y ) 2 . What is the socially optimal level of air pollution?
(a) 7
(b) 9/2
(c) As much as possible
(d) 23/3
(e) 4
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education