Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Amanda keeps bees to produce honey. Each hive produces $350 worth of honey each month. The table below shows Amanda's marginal cost of tending
Amanda keeps bees to produce honey. Each hive produces $350 worth of honey each month. The table below shows Amanda's marginal cost of tending each bee hive and her private marginal benefit, which is equal to the market value of the honey each hive produces. Marginal Cost and Marginal Benefit Quantity (hives) 1 2 3 4 5 MCprivate MB private $50 $350 150 250 350 450 350 350 350 350 MB external $ MB Social $ Instructions: Enter your answers as a whole number. a. What is the optimal number of hives for Amanda to tend? hive(s) Now suppose that each of Amanda's bee hives also provides pollination services to surrounding farms and that these services are worth $100 per hive per month. b. Fill in the external marginal benefit (MB external) and the social marginal benefit (MB social columns in the table above. c. What is the socially efficient number of hives for Amanda to tend if all costs and benefits are considered? ] hive(s)
Step by Step Solution
★★★★★
3.45 Rating (177 Votes )
There are 3 Steps involved in it
Step: 1
Quantity 1 2 3 4 5 MC private 50 150 250 350 450 MB pri...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started