part a Draw consumption and marginal cost time paths for a depletable resource with a stabledemand and constant MC (this is the first model we drew in class) for each of the belowdescriptions. Illustrate how what is described differs from the optimal paths for the depletable,utilizing the same graph. (So, you'll have two lines on each time path model: one for thereference depletable, and one for what is described). This is an exercise called "comparativestatics".Society expects a reasonable renewable perfect substitute withconstant MC to become available in the future, where Choke Price >MCrenewable > MCdepletable·i. Show change in time pathsа.ii. Do we still exhaust the resource?b.Consider TWO depletables, but one with a higher marginal costs. Forexample, Choke Price > MCoil > M Cnatural gas:i. Show change in time paths.ii. Do we still exhaust the resource?iii. Google: Is natural gas cleaner or dirtier to burn than oil? (cite sources APAor Chicago style)Explain why increasing marginal extraction costs are necessary toproduce a switch to a cleaner substitute before exhausting the depletable.С.

In environmental economics, the constant cost and increasing marginal cost depletable resource…

Answered: Draw consumption and marginal cost time…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Technology B uses 4 workers and 2 tonnes of coal to produce 100 meters of cloth. The worker's wages cost $10 and coal costs $5. We have previously calculated that the total cost of production is $50 and that the vertical intercept of the isocost line is 10.If there was a technology that used 1 more worker, how much would it have to decrease the coal required in order to cost the same? (Note: this is the absolute value of the slope of the isocost line.)
Suppose the relationship between your study time and your grade on a History midterm is given by the following table: If you study for Your grade will be 4 hours 80 5 hours 90 6 hours 93 a) What is the "marginal grade improvement (MGI)" of the 5th hour of studying? b) What is the "marginal grade improvement (MGI)" of the 6th hour of studying? c) Why might the MGI be diminishing?
A company uses two inputs, unskilled labour (L) and capital (K), to produce its product. The wage rate for a unit of labour is €5, while a unit of capital cost €20. a) Determine the equation and plot the isocost line for the company's expenditures on itsinputs of €1,000. Label the intercepts of the isocost with both axes. Draw a typical isoquant for an output level Q0 and indicate the optimal input levels of L and K. (Do not forget to label the axes). b) Suppose the government introduces a minimum wage for unskilled labour of €6 per unit.Show graphically and explain shortly how much it would cost the firm in the short run, with capital input fixed at K, to keep its output constant at Q0. c) Show graphically and comment shortly on the optimal factor mix that the firm would use to produce Q0 in the long run at the specified minimum wage of €6 per unit.
Transportation costs per ton of product vary with distance. For trucks the function is: TCt = 3 + 1.25d For rail it is: TCr = 5 + d For barge it is: TCb = 6 + 1.1d where d is the distance in hundreds of miles and TC is dollars per ton. Make a table showing the least cost mode of transport for distances d = 1, 2, ...,10. Graph the problem and label the modal break points clearly.
The marginal profit for a certain company is MP₁(x) = -x² + 18x-45. The company expects the daily production level to rise from x = 3 to x = 5 units. The management is considering a plan that would have the effect of changing the marginal profit to MP₂(x)= -x² +14x-33. Should the company adopt the plan? Determine the area between the graphs of the two marginal profit functions from x = 3 to x = 5. Interpret this area in economic terms. C Should the company adopt the plan that would make the marginal profit be MP₂? O A. Yes, because the company will make a larger profit under the new plan. B. No, because the company's profit will be smaller under the new plan. O C. It is impossible to tell using the given information. The area between the graphs of the two marginal profit functions from x = 3 to x = 5 is sq. units.
Suppose that a furniture manufacturer produces tables. The manufacturer's production function is Q(KL)- 2K0.8 0.2 where Kis the number of wood saws and L is the number of labor hours used to produce tables. The prevailing wage rate is $10 per hour and the rental rate associated with wood saws is $50. The manufacturer has a goal to produce 1,000 units. What Lagrangian equation can be used to solve the manufacturer's cost minimization problem? Oa. C = 2K12 s.t. 1,000 = 50K + 10L b. = Oc L = Od. L = 10K + 50L s. t. 1,000 = 2K08102 50K + 10L s.t. 1,000= 2KL02 2K10 s. t. 1,000= 10K + 50L
Consider the following linear program: Maximize 30X + 10Y Subject to: 3X + Y ≤ 300 X + Y ≤ 200 X ≤ 100 Y ≥ 50 X,Y ≥ 0 (a) Solve the problem graphically. Is there more than one optimal solution? Explain. (b) Are there any redundant constraints?
Let C(T) be a function that models the dependence of the cost (C) in thousands of dollars on the amount of ore to extract from a copper mine measured in tons (T): 1) If you computed the average rate of change of cost with respect to tons for production levels between T = 20000 and T = 40000, give the units of your answer (no calculations - describe the units of the rate of change). 2) If you had a function for C(T) and were able to calculate the answer to part 1, explain why you would not expect your answer to be negative (explanation should be in terms of cost, tons of ore to extract, and rates of change).
The chemical X-2000 is produced using two inputs, benzene (B) and labor (L) in the exact proportions of one gallon of benzene for each two hours of labor services. Firms in the industry have the production function: qX = min[B, 0.5L] The production of X-2000 generates fumes that greatly increase the chance of cancer among workers. The workers would suffer no ill health effects if they were provided with masks containing a filtering system. The masks increase the hourly cost of labor by another $2. Suppose that in response to this health hazard, the government enacts a regulation that requires the firm to provide each worker with a mask. f) Do you think the new regulation will affect the firm’s choice of input levels (i.e. the firm’s cheapest technique) for a given level of output? g) How will the new regulation affect the firm’s total and marginal cost functions?
C&A Fast Food has four activities in serving a customer: greet customer, take order, process order, and deliver order. Each activity is staffed by one employee (for a total of four employees). The processing time for each activity is given as follows: Greet customer Take order Process order Deliver order Activity Processing time per customer 2 seconds 30 seconds 60 seconds 5 seconds Assume demand is unlimited. If one additional employee is added to the bottleneck activity, what will be the percentage change in process capacity?
Hi, I have been trying to compute the optimal values from this lagrangian. But I can't seem to find a way to get the values from the answer key. I attached both the question and answers. Could you please explain to me how to get these values from the first-order conditions? Thank you very much
The cost of controlling carbon dioxide emissions [C(E)] at a firm goes up rapidly as the amount of emissions (E) increase. Let's assume the relationship is defined by the function below. C(E)= 5000+ 40E +2E² E20 where E is measured in tonnes per year and C is measured in dollars per year. a) Determine the Marginal Cost function for controlling carbon dioxide emissions and find the marginal cost at 50 tonnes of emissions: b) Determine the Average Cost Function for controlling carbon dioxide emissions and find the tonnes of emissions at minimum average cost. c) The government is charging a tax of $270 for every tonne of carbon dioxide emitted. At, 50 tonnes of emissions, is it profitable for the firm to control emissions on its own or pay the carbon tax?

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