7. It's the standard Coasian bargaining question. Imagine there's a coyote rancher and a famer raising com. From time to time the coyotes get into the com and eat some of it. To be more specific, imagine that this relationship looks like the following: Marginal Marginal private cost com loss $ 50 S 75 # of Coyotes $100 2 $200 3 $300 $100 4. $400 $125 5 $500 $150 6. $600 $175 People who don't like having visitors might want a coyote as a pet, and the prevailing market price for a coyote is $425. A. Based on the numbers above, how many coyotes would the rancher like to raise? B. Based on the numbers above, what is the socially optimal or the efficient number of coyotes? C. Imagine that the farmer bribes the rancher to move from the profit maximizing to the efficient number of coyotes. Into what range would this payment fall? |
7. It's the standard Coasian bargaining question. Imagine there's a coyote rancher and a famer raising com. From time to time the coyotes get into the com and eat some of it. To be more specific, imagine that this relationship looks like the following: Marginal Marginal private cost com loss $ 50 S 75 # of Coyotes $100 2 $200 3 $300 $100 4. $400 $125 5 $500 $150 6. $600 $175 People who don't like having visitors might want a coyote as a pet, and the prevailing market price for a coyote is $425. A. Based on the numbers above, how many coyotes would the rancher like to raise? B. Based on the numbers above, what is the socially optimal or the efficient number of coyotes? C. Imagine that the farmer bribes the rancher to move from the profit maximizing to the efficient number of coyotes. Into what range would this payment fall? |
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
ChapterA: The Use Of Mathematics In Principles Of Economics
Section: Chapter Questions
Problem 3RQ: Exercise A3 What dome slices of a pie chart represent?
Related questions
Question
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 3 steps
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 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax
Principles of Economics 2e
Economics
ISBN:
9781947172364
Author:
Steven A. Greenlaw; David Shapiro
Publisher:
OpenStax