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

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
icon
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
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Clean Air Act
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.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
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)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
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-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education