Homework Help is Here – Start Your Trial Now!
Business
Operations Management
The figure to the right shows the marginal private benefits to a US farmer for irritating her land (suppose there are no external benefits). It costs $100 per acre to irrigate the land. Each acre of land irrigation generates a gallon of salty runoff that winds up in the Colorado River. It costs $50 per gallon to Price ($) 275 250 225 200 175 desalinate the river water so Mexican farmers can irrigate their a. Draw the marginal private cost of irrigation on the graph. b. Draw the marginal social cost of irrigation on the graph. c. How many acres will the US farmer irrigate based on private incentives? d. What is the socially efficient level of irrigation? e. What would be the total gain in surplus if this externality were fully internalized within the market? 150 crops. 125 100 75 50 25 MPB 10 20 30 40 50 60 70 80 90 100 110 Irrigation (acres)

The figure to the right shows the marginal private benefits to a US farmer for irritating her land (suppose there are no external benefits). It costs $100 per acre to irrigate the land. Each acre of land irrigation generates a gallon of salty runoff that winds up in the Colorado River. It costs $50 per gallon to Price ($) 275 250 225 200 175 desalinate the river water so Mexican farmers can irrigate their a. Draw the marginal private cost of irrigation on the graph. b. Draw the marginal social cost of irrigation on the graph. c. How many acres will the US farmer irrigate based on private incentives? d. What is the socially efficient level of irrigation? e. What would be the total gain in surplus if this externality were fully internalized within the market? 150 crops. 125 100 75 50 25 MPB 10 20 30 40 50 60 70 80 90 100 110 Irrigation (acres)

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
See similar textbooks
icon
Related questions
Question
3. The figure to the right shows the marginal private benefits to a US farmer for irritating her land (suppose there are no external benefits). It costs $100 per acre to irrigate the land. Each acre of land irrigation generates a gallon of salty runoff that winds up in the Colorado River. It costs $50 per gallon to Price ($) 275 250 225 200 175 desalinate the river water so Mexican farmers can irrigate their crops. a. Draw the marginal private cost of irrigation on the graph. b. Draw the marginal social cost of irrigation on the graph. c. How many acres will the US farmer irrigate based on private incentives? d. What is the socially efficient level of irrigation? e. What would be the total gain in surplus if this externality were fully internalized within the market? 150 125 100 75 50 25 MPB 10 20 30 40 50 60 70 80 90 100 110 Irrigation (acres)
Transcribed Image Text:3. The figure to the right shows the marginal private benefits to a US farmer for irritating her land (suppose there are no external benefits). It costs $100 per acre to irrigate the land. Each acre of land irrigation generates a gallon of salty runoff that winds up in the Colorado River. It costs $50 per gallon to Price ($) 275 250 225 200 175 desalinate the river water so Mexican farmers can irrigate their crops. a. Draw the marginal private cost of irrigation on the graph. b. Draw the marginal social cost of irrigation on the graph. c. How many acres will the US farmer irrigate based on private incentives? d. What is the socially efficient level of irrigation? e. What would be the total gain in surplus if this externality were fully internalized within the market? 150 125 100 75 50 25 MPB 10 20 30 40 50 60 70 80 90 100 110 Irrigation (acres)
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps with 3 images

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Financial management
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Practical Management Science
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Business in Action
Business in Action
Operations Management
ISBN:
9780135198100
Author:
BOVEE
Publisher:
PEARSON CO
Purchasing and Supply Chain Management
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.
SEE MORE TEXTBOOKS