HW_2 - EEP101 HW2 Due: March 8th 1. There are two lettuce...

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EEP101 HW2 Due: March 8th 1. There are two lettuce farmers. The only input they use to produce lettuce is water and the production function is given by Y = 300 ε - ( 29 2 , where Y is the per- acre production of lettuce, W e is the effective water. Effective water refers to water really used by lettuce. It is the fraction of water applied that is really used by lettuce. Specifically, W e = η ι , i = Α , Β , where W is the amount of water applied per acre, h i is input use efficiency, or fraction of the applied water that is used by lettuce. h A = 0.8 , and h B = 0.5 under the traditional irrigation method “tunnel”. (Farm A’s soil quality is better so it can use water more effectively than farmer B’s). Now the technology of sprinkle irrigation method becomes available. If the farmers switch to the new technology, more applied water will actually reach lettuce. Specifically, h i new = μ ιν(1.5 ,129 . That is, the new technology could increase input use efficiency by 1.5 times the old input use efficiency or up to 1. If
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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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HW_2 - EEP101 HW2 Due: March 8th 1. There are two lettuce...

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