Answered step by step
Verified Expert Solution
Link Copied!

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... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Microeconomics

Authors: Christopher T.S. Ragan, Richard G Lipsey

14th canadian Edition

321866347, 978-0321866349

More Books

Students also viewed these Finance questions