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Suppose you and a friend are stranded on an island and must gather firewood and catch fish to survive. Through? experience, you know that if each of you spends an entire day on either? activity, the result is given in the following? table:
Fish
You
7
5 bundles
Your Friend
8 fish
3 bundles
You and your friend decide that you should each specialize so that one person catches fish while the other gathers firewood. But who should do which? task?
a. What is the opportunity cost for you to gather an additional bundle of? firewood?
The opportunity cost for you to gather an additional bundle of firewood is ___ fish
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Suppose that firms’ marginal and average costs are constant and equal to c and that inverse market demand is given by P = a – bQ, where a,b>0. Calculate the profit maximizing price-quantity combination for a monopolist. Also calculate the monopolist’..
Consider the Tragedy of the Commons game with two shepherds, A and B. LetsA and sB denote the number of sheep each shepherd grazes on the common pasture. Assume the benefit per sheep equals 300−sA −sB. Compute the flock sizes and shepherds’ total ben..
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