Question
FIVE-PART QUESTION 3a. Melanie and Oli are competing Pacific halibut fishers. Both have been allocated ITQs that limit their catch to 1,000 tons of Pacific
FIVE-PART QUESTION
3a. Melanie and Oli are competing Pacific halibut fishers. Both have been allocated ITQs that limit their catch to 1,000 tons of Pacific halibut each. Melanie's cost per ton is $20; Oli's cost per ton is $28. Assume that the market price of Pacific halibut is $40 per ton. If Melanie pays Oli $10 per ton for his ITQs and then catches her new limit of 2,000 tons, her profit would be
Multiple Choice
a. $20,000.
b. $32,000.
c. $30,000.
d. $40,000.
3b. Melanie and Oli are competing Pacific halibut fishers. Both have been allocated ITQs that limit their catch to 1,000 tons of Pacific halibut each. Melanie's cost per ton is $26; Oli's cost per ton is $30. If the market price of Pacific halibut is $45 per ton, and Melanie and Oli both catch their quota, their combined profit will be
Multiple Choice
e.$15,000.
f. $19,000.
g. $34,000.
h. $45,000.
3c. Melanie and Oli are competing Pacific halibut fishers. Both have been allocated ITQs that limit their catch to 1,000 tons of Pacific halibut each. Melanie's cost per ton is $20; Oli's cost per ton is $25. If the market price of Pacific halibut is $35 per ton, what is the minimum amount per ton that Melanie would have to offer Oli to convince him to sell Melanie his ITQs?
Multiple Choice
i. $5.
j. $12.
k. $10.
l. $15.
3d. Melanie and Oli are competing Pacific halibut fishers. Both have been allocated ITQs that limit their catch to 1,000 tons of Pacific halibut each. Melanie's cost per ton is $36; Oli's cost per ton is $40. If the market price of Pacific halibut is $48 per ton, what is the maximum amount Melanie would be willing to pay per ton for Oli's ITQs?
Multiple Choice
m. $8.
n. $40.
o. $12.
p. $48.
3e.
A Middle Eastern country has an oil reserve that it can extract for a profit of $150 a barrel today, $190 a barrel in two years, $200 a barrel in three years, and $220 in four years. The current market rate of interest is 10 percent. When should this country tap into its oil reserve to obtain the most profit per barrel in present value terms?
Multiple Choice
three years
four years
today
two years
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started