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of Department Agricultural and Resource Economics University of California, Berkeley Solutions to Problem set 2 1. Uncertainty (Weitzman's model, see Chapter 6, pp11-16). We know that MSC = 2 + x, MB = 20 0.5 x, Thus social optimal outcome is when MSC = MB EEP101/ECON125 David Zilberman 2 + x = 20 0.5 x x* = 12. If government believe that MBH = 30 0.5 x, they will choose output standard such that MSC = MBH...
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of Department Agricultural and Resource Economics University of California, Berkeley Solutions to Problem set 2 1. Uncertainty (Weitzman's model, see Chapter 6, pp11-16). We know that MSC = 2 + x, MB = 20 0.5 x, Thus social optimal outcome is when MSC = MB
EEP101/ECON125 David Zilberman
2 + x = 20 0.5 x
x* = 12.
If government believe that MBH = 30 0.5 x, they will choose output standard such that MSC = MBH 2 + x = 30 0.5 x xH = 18.7. If the government like to use tax, and they believe that the optimal outcome should be 18.7 as calculated above, then tax rate t* = MSC (xH) = 2 + 18.7 = $20.7. Since the true demand is MB = 20 0.5 x, by t* = MB = $20.7 xHTAX = (20 20.7) * 2 = -1.4 < 0, TAX = 0 (nonnegativity constraint). thus the outcome will be xH If ...
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Berkeley - ARE - 101
Department of Agricultural and Resource Economics University of California at BerkeleyEEP 101/ECON 125 David ZilbermanPROBLEM SET 31. Apples are produced with fertilizers. Let: Y = output per acre X = fertilizers Y = Aa il Xa il is the input u
Berkeley - ARE - 101
Berkeley - ARE - 101
Department of Agricultural and Resource Economics University of California at BerkeleyENV ECON 101/ECON 125 David ZilbermanHomework No. 41. Hedonic prices. Table 1 presents the prices of properties of four types of houses:Type of house 1 2 3 4
Berkeley - ARE - 101
Department of Agricultural and Resource Economics University of California, Berkeley Solutions to Problem set 4EEP101/ECON125 David Zilberman1. Hedonic prices, see Chapter 9, pp6-8. We hypothesize that house price depends on the three housing cha
Berkeley - ARE - 101
Department of Agricultural and Resource Economics University of California at BerkeleyEEP 101/ECON 125 David ZilbermanHomework No. 51. Climate change. 3. The profits of 1 unit of land in corn (the hot crop) is p H , and 1 unit of land producing
Berkeley - ARE - 101
Department of Agricultural and Resource Economics University of California, Berkeley Solutions to Problem set 5EEP101/ECON125 David Zilberman1. Climate change, see Chapter 14, pp1-2. Which crop to produce is determined by the relative profitabili
Berkeley - ARE - 101
(To be handed in to Aaron by the beginning of class February 6th)EEP 101 Homework #1This homework will help you understand welfare analysis, externalities, and monopoly/monopsony. 1) Let the market for SUVs be characterized by a Societal Utility
Berkeley - ARE - 101
EEP 101 Homework #1 Answer Key 1) Let the market for SUVs be characterized by an Aggregate Utility Function equal toU ( S ) = 100 S in $).S2 S2 , and a Cost of Production function equal to C ( S ) = (where both U and C are 4 2a) Imagine that yo
Berkeley - ARE - 101
Name and ID: Section: EEP 101 /ECON 125 Problem Set #2 (Please hand in to Anna by beginning of class TU 25th February) Please answer all questions and copy your final answers on this sheet where requested. Be advised that your whole answer will be gr
Berkeley - ARE - 101
Spring 2003Solution Set to PS #2When problem sets are corrected, if a mark S is made that means that you should refer to these "Solutions" for more explanation. Total points: 100 Problem 1 (50 points) Part I (16 pts) Uncertainty about Demand Q is
Berkeley - ARE - 101
Department of Agricultural and Resource Economics University of CaliforniaEconomics EEP101/ECON125, Spring 2003 Professor ZilbermanHomework Set #3Due at the Lecture on March 13th to Yanhong Jin1 Public GoodYou find a very exciting summer inte
Berkeley - ARE - 101
Department of Agricultural and Resource Economics University of CaliforniaEconomics EEP101/ECON125, Spring 2003 Professor ZilbermanSolutions to Homework Set #31 Public GoodYou find a very exciting summer internship job as an assistant to the d
Berkeley - ARE - 101
Department of Environmental Economics and Policy University of CaliforniaEconomics EEP101/ECON125, Spring 2003 Professor ZilbermanHomework Set #4Due at the Lecture on April 15th, to Yanhong Jin1 Dynamic SystemDiminishing Island has a special
Berkeley - ARE - 101
Notes on fisheries and forest economics: 1. Basically, the economics of forest and fisheries resources are very similar in terms of the dynamic management since both of them are renewable resources. 2. Differences between the economics of a forest an
Berkeley - ARE - 101
Department of Environmental Economics and Policy University of CaliforniaEconomics EEP101/ECON125, Spring 2003 Professor ZilbermanHomework Set #4Due at the Lecture on April 15th, to Yanhong Jin1 Dynamic SystemDiminishing Island has a special
Berkeley - ARE - 101
EEP 101/ECON 125 Spring 2003 Due: April 29Problem Set #51) The Impacts of Climate ChangeCrop Profits Before Climate Change Warm crop Cold crop south north In class we developed a two-crop model to examine the impacts of climate change. Th
Berkeley - ARE - 101
EEP 101/ECON 125Problem Set #5 Suggested Solutions1) The Impacts of Climate ChangeCrop Profits Before and After Climate Change southnorth a) I drew the new profit curves everywhere to the right of the old profit curves. This represents t
Berkeley - ARE - 101
g Q &jQ ! 1 % g ' 1kQ $! fy$w # a # Q f }(yGQ f g | hUWV ' T ' W$S # 1 Q # S Q Q S g TV Q i S g g S p x S QV x S QV S jWQ # f ' x % g % T ' jsUa % `Q f lUjQ # Q f }WjG`Q f g | U(V e yQ f x4r xi bQ g g x g c TV Q iSggS V % a g x T ' h
Berkeley - ARE - 101
h ) ' h i e fqq i # h i ' h ie q q e # di (% (g WIo q # e (% I' f # i k i % "f q h ' @gi 6 $l # i o i q l ' h q '% ) i h h f h q $k ' h i r1n# u} bgi h $' ( bv n# $' i nl h bgi h ' i h # 1r$ q i q% e q q l h # )% f q% q q
Berkeley - ARE - 101
Department of Environmental Economics and Policy University of California, Berkeley MidtermEconomics EEP101/ECON125, Spring 2003 Professor ZilbermanInstructions: Please remember to write your name and Student ID# on your bluebook. Answer all ques
Berkeley - ARE - 101
Department of Agricultural and Resource Economics University of CaliforniaEconomics EEP101/ECON125, Spring 2003 Professor ZilbermanMidterm SolutionsPart 1: Market Structure and Externality1. Numerical Questions The social optimal number of sho
Berkeley - ARE - 101
EEP 101/Econ 125 Spring 2002 GSIs: Alix, McKim, SchoengoldProblem Set #1: due on Thursday, February 14 at lecture.Late assignments will not be accepted. Numerical Questions (1) Suppose that an industry has an inverse demand curve given by P = 90
Berkeley - ARE - 101
EEP 101/Econ 125 Spring 2002 GSIs: Alix, McKim, Schoengold Solutions to Problem Set #1 Numerical Questions: For the numerical questions, there are graphs at the end of the solution key that show how to calculate the answers using graphical methods. T
Berkeley - ARE - 101
Heterogeneity Revisited Clarification for EEP101/Econ125 The following handout is intended to clarify the concept of heterogeneity among producers and the effect of particular policy interventions in this context. I will be using the same example tha
Berkeley - ARE - 101
EEP 101/ECON 125 Prof. Zilberman GSIs: Alix, McKim, Schoengold Problem Set # 2 Due Tuesday, March 5 (Assignments turned in after the beginning of lecture will not be graded) Numerical problems 1. Assume that manufacturing of PVC tubing, which produce
Berkeley - ARE - 101
EEP 101/ECON 125 Prof. Zilberman GSIs: Alix, McKim, Schoengold Suggested Solutions for Problem Set # 2 Numerical problems 1. Assume that manufacturing of PVC tubing, which produces large amounts of carcinogenic byproducts, is undertaken by two firms.
Berkeley - ARE - 101
EEP 101/ECON 125 Prof. Zilberman GSIs: Alix, McKim, SchoengoldDue Tuesday, March 19th(Assignments turned in after the beginning of lecture will not be graded)Problem Set # 31.(Public Goods) You have just received an important assignment as a
Berkeley - ARE - 101
EEP 101/ECON 125 Prof. Zilberman GSIs: Alix, McKim, SchoengoldAnswer Key for Problem Set # 31. (Public Goods) You have just received an important assignment as a consultant to the Prime Minister of a small country called Zilbermania. The Prime Min
Berkeley - ARE - 101
EEP101/Econ125 Spring `02 Professor David Zilberman GSIs: Alix, McKim, SchoengoldSUGGESTED SOLUTIONS FOR MIDTERM EXAM1. Suppose that farmers in Brazil grow coffee beans with MPC = 10 + 3/2Q. The coffee beans are bought by a middleman, who sells th
Berkeley - ARE - 101
EEP101/ECON 125 Professor Zilberman GSIs: Alix, McKim, SchoengoldDue Tuesday, April 23rd (Assignments turned in after the beginning of lecture will not be graded)Problem Set #4Now Ill tell you, he says, with his teeth sounding gray, how the Lora
Berkeley - ARE - 101
EEP101/ECON 125 Professor Zilberman GSIs: Alix, McKim, SchoengoldProblem Set #4 Answer Key"Now I'll tell you," he says, with his teeth sounding gray, "how the Lorax got lifted and taken away. It all started way back. Such a long, long time back. W
Berkeley - ARE - 101
EEP 101/Econ 125 Professor Zilberman GSIs: Alix, McKim, SchoengoldProblem Set #5Due Thursday, May 9th (Assignments turned in after the beginning of lecture will not be graded) 1) Assume that there are two types of farmers in a region those who gr
Berkeley - ARE - 101
EEP 101/Econ 125 Professor Zilberman GSIs: Alix, McKim, SchoengoldProblem Set #5 Answer Key1) Assume that there are two types of farmers in a region those who grow cotton, and those who grow roses. Let W denote the applied water. The marginal ben
Berkeley - ARE - 101
Water Example: So, as I was saying in section, there are two groups of interest, the farmer and the ten sports fishermen. Their benefits functions are given as follows:B f (Y f ) = 240Y f - 2Y f2 Bsi (Ys ) = 18Ys - 0.05Ys2The constraint here is th
Berkeley - ARE - 101
Berkeley - ARE - 101
AGRICULTURAL BIOTECHNOLOGY: PRODUCTIVITY, BIODIVERSITY, AND INTELLECTUAL PROPERTY RIGHTSDavid Zilberman Gregory GraHolly Ameden Matin QaimAn Article Submitted toJournal of Agricultural & Food Industrial OrganizationManuscript 1068Univers
Berkeley - ARE - 101
Chapter #1: What Is Economics?Contents: General OverviewMajor Areas of Economics Economic Research in Agricultural and Natural Resources Biology and Economics Economics in the Policy Process The Economics Profession Subdiciplines of Environmental a
Berkeley - ARE - 101
Chapter #2: When is a Market Socially Optimal?Contents: Basic Definitions Potential Reasons for Government Intervention in the Market 1. Government Policies to Disseminate Information 2. Externalities 3. Public Goods 4. Transfer Policies 5. Noncompe
Berkeley - ARE - 101
Chapter #3: Welfare EconomicsContents: General Analysis Overview Welfare under Monopoly Welfare under Monopsony Welfare under MiddlemenGeneral Analysis Overview Welfare analysis is a systematic method of evaluating the economic implications of alt
Berkeley - ARE - 101
Chapter #4: Negative Externalities and PolicyContents: General Overview Production Externalities Policy 1: Externality Tax Policy 2: Output-reduction Subsidy Policy 3: Standards Elasticity Effects on Magnitude of Externalities Imperfect Competition
Berkeley - ARE - 101
Chapter #5: Issues in Externality ControlContents: Positive Externalities Polluter Heterogeneity The Benefits of Pollution Trading Problems Associated with Pollution Permit Markets Choice of Pollution Taxes or Standards Specification of Pollution in
Berkeley - ARE - 101
Chapter #6: Other Considerations of Externality PolicyContents: General Overview Legal Aspects of Environmental Policy & Coase Theorem Determination of Property Rights Allocation Alternative Legal Arrangements Economics of Environmental Restoration
Berkeley - ARE - 101
Chapter #7: Public GoodsContents: General Overview Heterogeneity, Non-rivalry, and Market Failure Non-excludability and Market Failure Optimal Provision with Homogeneous Individuals Market Outcome for a Non-excludable Public Goods Other Mechanisms f
Berkeley - ARE - 101
Chapter #8: Technological Change and Pollution ControlContents: Production Function and Technology Research Adoption of Innovations Adoption Choices of Conservation Technology Costs to Adoption Pollution Tax Considerations Second Best Policies Produ
Berkeley - ARE - 101
Chapter #9: Valuation of Environmental BenefitsContents: General Overview Types of Benefits Concepts in Benefits Measurement Uncertainty, Expected Benefits, and Risk Aversion Methodologies for Benefits ValuationGeneral Overview There are many type
Berkeley - ARE - 101
Chapter #10: Natural Resource EconomicsContents: General Overview Key Element of Dynamics: Interest Rate The Components of Interest Rates Discounting Uncertainty and Interest Rates Benefit-Cost Analysis General Overview Natural Resource Economics ad
Berkeley - ARE - 101
Department of Agricultural and Resource Economics School of Public Policy University of California at BerkeleyARE 298/ PP 290 David Zilberman Fall, 2001Chapter 14: THE ECONOMICS OF CLIMATE CHANGETopics The Impacts of Climate Change on Agricultur
Berkeley - ARE - 101
Addendum to Lecture 14Kyoto Climate Change The United States needs to reduce CO2 emissionsPAD_ QD = demand for CO2Q0 = initial levelQQ0Qt = target levelQ0 - Q1 = reduction requiredThe area AQ Q0 = social cost of CO2 reduction.Me
Berkeley - ARE - 101
Chapter #15: Forestry EconomicsContents: General Overview Differences Between Issues of Forestry and Fisheries The Economic Decision to Harvest a Stand The Case of an Infinite Forest Rotation Management of Forest Resources Factors Affecting Forest R
Berkeley - ARE - 101
Chapter #16: Surface Water EconomicsContents: Economic Characteristics of Water U.S. Water Rights History and Property Rights Law Riparian Water Rights Prior Appropriation Water Rights The Role of Water Districts Transition from Queuing to Markets R
Berkeley - ARE - 101
EEP 101/ECON 125CHAPTER 16A Water NOTESDavid Zilberman SPRING 2002TOPICS Water Use and Value Water around the World/Virtual Water Water Rights Systems Transitions from Water Rights to Water Markets Third Party Effects and Trading in Water Water
Berkeley - ARE - 101
Chapter #17: Irrigation EconomicsContents: General Overview An Example of Technology Choice Under Markets Some Stylized Facts About Irrigation Queuing Vs. Markets: A Numerical Example Government Appropriates Water Rights General Overview The economi
Berkeley - ARE - 101
Chapter #18: Pesticide EconomicsContents: General Overview A Brief History of Pesticide Use Pesticides in a Damage Control Framework Pesticide Resistance Unknown Pest Populations and Pest Population Monitoring Regional Cooperation in Pest Control Ac
Berkeley - ARE - 101
EEP 101 Econ 125Chapter 20: Environmental ServicesDavid Zilberman Spring 2002TOPICS: Categories of environmental services Targeting and policy design The Role of Correlation Scale Effects Market Effects and Slippage Organizational structure and
Berkeley - ARE - 101
Targeting Environmental Fund -Differences between maximizing benefits and acreage budget $1000 Parcel numbe Rent/A Benfits Benefits benfit Acreage r cre /acre Acres /$ max. max.1 2 3 4 5 6 7 8 9 10 11 12 5 7 3 9 2 4 5 8 3 10 3 8 15 28 18 18 20 32 20
Berkeley - ARE - 101
Targeting Environmental Fund - Effects of ScalePrice per acre, $2 for parcel A and $4 for parcel B objective is to maximize total benefts given the budget constraints. Budget Acre total benefit A1 2 3 4 5 6 7 8 9 10 11 12 6 13 21 30 41 52 63 70 76
Berkeley - ARE - 101
Targeting Environmental Fund - effects of correlation budget $2000 max. max. benefit acreage Rent/ Benfits Benefit Acres Acres Acre /acre Acres s/$ to buy Cost to buy Cost 100 100 1 1 100 1.00 100 200 2 4 100 2.00 100 300 3 8 100 2.67 100 400 4 12 10
Berkeley - ARE - 101
Agricultural Policy ARE 241 David Zilberman ANIMAL WASTEBackground Animal waste is one of the major pollution problems in the United States. At any given moment, there are 2 to 3 times more farm animals than there are people. The resulting effects
Berkeley - ARE - 101
Department of Agricultural and Resource Economics University of California at BerkeleyEEP 101/ECON 125 Spring Semester, 2002 David ZilbermanChapter 22 On Economics, Ethics, Politics, and the EnvironmentThe Assumptions Behind Economic Analysis Ec
Berkeley - ARE - 101
EEP101/ECON125 Spring 01 Prof. D. Zilberman GSIs: Just/Marceau/St.Pierre Solutions to Problem Set 1 Part A: Numerical Problems 1. The numerical results for question 1 are given in Table 1. Their derivation is explained below. Table 1 Monopoly Monopol
Berkeley - ARE - 101
EEP 101/ECON 125 Spring 2001 Solutions to Problem Set 2 1. Equilibrium conditions for a competitive market are M C(Q; t) = p: Thus, without any government intervention, at any point in time t; Q = 500 + 500 cos 45020t : 157 (a) There are 1000 units