User Account

All Pages

Determining the marginal net benefit functions

Assignment Help Macroeconomics
Reference no: EM131197980

Consider a municipality A and an irrigation district B with the following marginal net benefit functions that describe net benefits from water consumption q.

MNBA = 72-12qA

MNBB = 30-qB

Recall marginal net benefits (MNB) shows the difference between marginal benefits and marginal costs. The quantity that maximizes net benefits is found where MNB=0.

a.) Assume the municipality A and the irrigation district B have two different sources of water. Assume it has been a very snowy winter and there is plenty of water for everyone.

How much water should be processed and consumed by each?

b.)How much total surplus (net benefits) is enjoyed by each?

c.) Now assume it has been a less snowy winter and water supplies are limited. Each lake contains only 9 units of water for the season. What is the efficient water consumption for each?

d.) How much total surplus is enjoyed by each?

e.) Now assume the municipality and the irrigation district have to share water from a single lake. In the current year, only 9 total units of water are available to be shared between the municipality and the irrigation district. How should these 9 units be allocated to  maximize net benefits? Show this result graphically.

Reference no: EM131197980

Questions Cloud

Explain using supply and demand graphs : Explain using supply and demand graphs how land use regulations, that specifically limit residential development in many areas in the U.S., might contribute to a housing bubble?
Development of formal water markets : What are some of the barriers to the development of formal water markets that could potentially lead to more efficient allocations of water?
Prepare a ledger using t accounts : Journalize the adjusting entries on August 31 for the 3-month period June 1-August 31.-  Prepare a ledger using T accounts. Enter the trial balance amounts and post the adjusting entries.
What are the expected one year interest rates year : Suppose that the yield curve show that the one year bond yield is 4 percent, the two yield is 4 percent, and the three year is 5 percent. Assume that the risk premium on the one year bond is zero, the risk premium on the two year bond is 1 percant, a..
Determining the marginal net benefit functions : Consider a municipality A and an irrigation district B with the following marginal net benefit functions that describe net benefits from water consumption q.
Determine the temperature and the mass of the vapor : A piston-cylinder device contains 2 ft3 of saturated water vapor at 50-psia pressure. Determine the temperature and the mass of the vapor inside the cylinder.
Number of foreign-trained physicians permitted : A group of American doctors have called for a limit on the number of foreign-trained physicians per- mitted to practice in the United States. What effect would such a limit have on the equilibrium quantity and price of doctors' services in the Uni..
Analyze manner in which ehr technology ensures improvement : From the third e-Activity, analyze the primary manner in which EHR technology ensures improvement in the quality of patient care.
Determine the total amount of delivery service : Kwik Delivery Service reports the following costs and expenses in June 2014.- Determine the total amount of delivery service (product) costs and Determine the period costs.

Reviews

Write a Review

Macroeconomics Questions & Answers

  Inflation targeting be a good policy

Why might it be difficult for the Fed to formally adopt inflation targeting?  Would inflation targeting be a good policy for the Fed in the present economic environment

  In using the taylor rule

In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables?

  Describe the present economic crisis situation in europe

Describe the present economic crisis situation in Europe.  Why has it been so difficult for the Europeans to find a solution to this problem?   Comment on what implications the crisis may have for the rest of the world if Europeans are not able to ag..

  Long-term federal government budget problems

Question:. Explain why there are long-term Federal government budget problems. Explain why the base-line forecast of the CBO is misleading.

  Derive and compare demand curve

Question based on Derive and compare demand curve,  Derive Ambrose's demand function for peanuts. How does it compare with Johnny's demand curve for peanuts?

  Problem based on utility function

Problem based on  Utility Function - Problem,  Answer and explain the following using a diagram which is completely labeled.

  Laffer curve : tax rate and tax revenue

Question based on Laffer Curve : Tax Rate and Tax Revenue,  Do raising tax rates necessarily raise tax revenue? What factors affect how tax revenue changes when tax rates change?

  Problem - income elasticity of demand

Problem - Income Elasticity of Demand,  Interpret the following Income Elasticities of Demand (YED) values for the following and state if the good is normal or inferior; YED= +0.5 and YED= -2.5

  Positive balance of payment

Question Positive Balance of Payment: "Things will look good for the US if we could just get to where we are consistently running a positive Balance of Payments."

  Effect of recession on the investment curve

Comment on the effect of a recession on the investment curve (only) and on the level of savings, investment, and the equilibrium real interest rate in the financial crisis that hits United States first starting in fall 2007.

  Affect of falling domestic investment on trade surplus and

How will a fall in domestic investment affect the trade surplus and net capital outflows in the domestic economy, the trade deficit and capital inflows in the rest of the world.

  Crises in the banking sector and bank run

Banking crises crisis decreases depositors' confidence in the banking system. What would be the effect of a rumor about a banking crisis on checkable deposits in such a country?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd