2. a. Suppose you want to remove ten fish of an exotic species that have illegally been...

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2.

a. Suppose you want to remove ten fish of an exotic species that have illegally been introduced to a lake. You have three possible removal methods.

Assume that q1, q2, and q3 are, respectively, the amount of fish removed by each method that you choose to use so that the goal will be accomplished by any combination of methods such that q1 + q2 + q3 = 10. If the marginal costs of each removal method are, respectively, $10q1, $5q2, and

$2.5q3, how much of each method should you use to achieve the removal cost-effectively?

b. Why isn’t an exclusive use of method 3 cost effective?

c. Suppose that the three marginal costs were constant (not increasing as in the previous case) such that MC1 = $10, MC2 = $5, and MC3 = $2.5.
What is the cost-effective outcome in that case?

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Environmental And Natural Resource Economics

ISBN: 9781315523965

10th Edition

Authors: Thomas H Tietenberg, Lynne Lewis

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