Question

In: Economics

At the Santa Barbara fishing hole, people come from all around to catch fish to sell...

At the Santa Barbara fishing hole, people come from all around to catch fish to sell at the fish market.
The total number of fish caught is F = 10x-x²
where x is the number of fishermen. Suppose it costs
each person $20 a day to fish and that fish sell for $10 each at the market. At the social optimum,
how much would it hurt all the other fishermen (combined) if one more person started fishing?
(a) $30
(b) $20
(c) $10
(d) $40

Answer D=40

could you please explain in detail?

Expert Solution

Soln. At social optimum, marginal social benefit = marginal social cost

Let no of fisherman = 2

Therefore, no of fish caught = 10*x - x² = 10*2 - 2² = 16

Total sale of the market = 10*16 (price of each fish is $10 and total no of fish is 16) = $160

Total cost of the market = 20*2 (cost for each fisherman to fish is $20 and total fisherman is 2) = $40

Benefit of market = total sale - total cost

= $160 - $40 = $120

Combined benefit of all the fisherman = $120

Benefit of each fisherman = 120/2 = $60

Now, let 1 extra fisherman added.

Therefore, total no of fisherman = 3

No of fish caught = 10*3 - 3² = 30 - 9 = 21

Total sale of the market = 10*21(price of each fish is $10 and total no of fish is 21)= $210

Total cost of the market = 20*3 (cost for each fisherman to fish is $20 and total fisherman is 3) = $60

New benefit of market = total sale - total cost

= $210 - $60 = $150

Benefit of each fisherman = 150/3= $50

Loss of each fisherman = $60 - $50 = $10

Combined loss = 2*20 = $20

Rahul Sunny answered 1 year ago

A fish hatchery manager estimates that on average fisherpersons catch 3.5 fish each fishing trip. A...

A fish hatchery manager estimates that on average fisherpersons catch 3.5 fish each fishing trip. A random sample of 10 fisherpersons showed they caught 3.9 fish per trip, with a standard deviation of 1.7 fish. Perform a test of hypothesis at a .10 alpha level to determine whether or not her claim is true. Use a two tailed test of hypothesis

Case #1 Kumar Boats Limited manufactures and sells fishing boats. All of the company’s sales come...

Case #1 Kumar Boats Limited manufactures and sells fishing boats. All of the company’s sales come from two products: the Hauler and the Deluxe. The Hauler is a basic boat built with the minimum required components necessary for a successful outing and sells for $24,000. The Deluxe includes additional features unavailable on the Hauler, such as adjustable padded seats, moveable storage boxes, and rod holders, and sells for $29,000. The boats are sold to retailers who then usually add an...

Two people have come to your restaurant with different offers. Sam "I'll sell you a brand...

Two people have come to your restaurant with different offers. Sam "I'll sell you a brand new soft-serve ice cream machine. It'll cost $4,000 and should provide you with an extra $1,000 of revenue every year. You'll only have to pay about $100/year to maintain it, and it should last for nine years. Ella "I run a party venue just down the street from your restaurant. I'll charge you $10,000 to put signage up in the venue, and you can...

From ”The Basic Practice of Statistics” by Moore. Many people who come to clinics to be...

From ”The Basic Practice of Statistics” by Moore. Many people who come to clinics to be tested for HIV don’t come back to learn the test results. Clinics now use ”rapid HIV tests” that give a result while the client waits. In a particular clinic use of rapid tests increased the percent of clients who learned their test results from 69% to 99.7%. The trade-off for fast results is that rapid tests are less accurate than slower laboratory tests. Applied...

What did Ekman and Friesen conclude from their research on facial expressions a. people around the...

What did Ekman and Friesen conclude from their research on facial expressions a. people around the world agree on the facial expressions that represent happiness and sadness but not other emotions b. people do not feel an emotion unless it registers on their face c. people who live in isolated primitve societies and never see modern westerners are unable to recognize emotions from facial expressions d. particular facial expressions are universally associated with particular emotions

This is all in Python. Also, the names come from a .txt file that i have...

This is all in Python. Also, the names come from a .txt file that i have created with 3 names on it(Jim,Pam,Dwight). Main Function. Write a program where the user enters a name. Using the read function, check to see if the name is in the text document. If it is, respond back to the user the name is found within the list. Read Function. The read function should return the contents of the text document as a list. EXAMPLE...

It appears that not all people are equally vulnerable to cancer. People from some ethnic groups...

It appears that not all people are equally vulnerable to cancer. People from some ethnic groups have higher or lower than average chances of developing certain types of cancer. Jennifer’s manager Dr. Steinberg thinks that the company’s insurance policy should reflect this fact and constantly raises this question in the meetings. To be more convincing, he asked Jennifer Nguyen to take a random sample of those Healthy Life clients who belong to ethnic group X (at least on their maternal...

"True leaders can only come from people who have understood the importance of diversity and have...

"True leaders can only come from people who have understood the importance of diversity and have engaged in different experiences. So chances are the leaders we have seen in war-torn or disaster-struck areas have had a wide amount of exposure to different people and cultures through volunteer work. A research by a leading social support agency postulates that altruistic leadership increases through travel and volunteer work unless there is very thorough training on how to work on such situations." If...

Project: Random variables are all around us, from the time we require to commute to school,...

Project: Random variables are all around us, from the time we require to commute to school, to the percentage of lecture material we remember for the exam, we can describe much of the world around us using probability. Project Statement: Find a random variable in your day-to-day life, call it X(ω), and do the following: • Describe X as either quantitative, qualitative, discrete, continuous, etc. • Give the support of X (i.e. its possible range of values) • Speculate on...

Suppose that caviar is a leading export from Sweden - Swedish firms sell it all over...

Suppose that caviar is a leading export from Sweden - Swedish firms sell it all over the world. The country finds that caviar has decreased in price on the world market due to an increase in production from Russia. Firms in Sweden find that they cannot sell as much caviar as usual. The Swedish also produce something called cloudberries that are only eaten in Sweden - no one else in world eats them. Due to news reports linking eating cloudberries...