homework3 - Department of Agricultural and Resource...

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Department of Agricultural and Resource Economics University of California Economics EEP101/ECON125, Spring 2003 Professor Zilberman Homework Set #3 Due at the Lecture on March 13th to Yanhong Jin 1 Public Good You find a very exciting summer internship job as an assistant to the director of a regional recreation office, and your first assignment is to give advice to the director about managing a beautiful wildlife reserve, which is called Diminishing Island. Below is the summary of information you have: The maintenance cost is MC =80 A where A is the land acreage maintained in Diminishing Island. There are 100 citizens. But only two types of residents are attracted to Diminishing Island: 10 bird- watchers and 20 wild-flower lovers. The individual marginal benefits are given by MB b =20 - 2 A for each bird-watcher, and MB w =20 - A for each wild-flower lover. 1. Aggregate demand and optimal level of public good (a) What is the aggregate demand for land acreage in Diminishing Island? (b) What is the social optimal land acreage maintained in Diminishing Island? 2. Management of public good After two-week reading and talking with people, you have the four proposals on management of Diminishing Island.
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This note was uploaded on 08/01/2008 for the course ECON 101 taught by Professor Wood during the Spring '07 term at University of California, Berkeley.

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homework3 - Department of Agricultural and Resource...

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