BN11.2 (a) (b) (c)Case:• A beekeeper lives adjacent to an apple orchard.• The orchard owner benefits from the bees because each hive pollinates aboutone acre of apple trees.• The orchard owner pays nothing for this service, however, because the beescome to the orchard without his having to do anything.• Because there are not enough bees to pollinate the entire orchard, the orchardowner must complete the pollination by artificial means:o At a cost of $10 per acre of treeso Beekeeping has a marginal cost MC = 10 + 50,▪ where Q is the number of beehives.o Each hive yields $40 worth of honey.Questions:(a) How many beehives will the beekeeper choose to maintain?(b) Is this the economically efficient number of hives from the societal pointof view?(c) What could the orchard owner and/or the beekeeper do to produce a moreefficient operation?

When a firm produces a good sometimes it creates cost or benefits for other firms. If it is creating…

• A beekeeper lives adjacent to an apple orchard. • The orchard owner benefits from the bees because each hive pollinates about one acre of apple trees. • The orchard owner pays nothing for this service, however, because the bees come to the orchard without his having to do anything. • Because there are not enough bees to pollinate the entire orchard, the orchard owner must complete the pollination by artificial means:

• A beekeeper lives adjacent to an apple orchard. • The orchard owner benefits from the bees because each hive pollinates about one acre of apple trees. • The orchard owner pays nothing for this service, however, because the bees come to the orchard without his having to do anything. • Because there are not enough bees to pollinate the entire orchard, the orchard owner must complete the pollination by artificial means:

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter14: Environmental Economics

Section: Chapter Questions

Problem 7SQ

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