ps5 - Department of Agricultural and Resource Economics...

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Department of Agricultural and Resource Economics EEP 101/ECON 125 University of California at Berkeley David Zilberman Homework No. 5 1. Climate change . 3. The profits of 1 unit of land in corn (the hot crop) is p H , and 1 unit of land producing wheat (the cold drop) is C . They are functions of temperature T and carbon C in the atmosphere following pp HC TT C T T C =- - - = - (( ) ( )) ( ) 53 3 5 22 . Before climate change, a country has 1 unit of agricultural lands on all locations with L = 0 to L = 12. The temperature at location L is T = 8 - L . Therefore, at the location with L = 0, the temperature is 8 (very hot) and at L = 12 it is -4. Before climate change, C = 1. a. What will be the pattern of production before climate change? (Where are crops 1 and 2 grown?) How is profit distributed across locations? (Compute () , () , (). .. ( ) 01 21 2 recognizing that the most profitable crop will be grown at each location and nothing will be grown when profit is negative.) b. Suppose that after climate change T = 10 - L and C = 1.1. What do these changes mean? How will climate change affect the allocation of production and distribution of profit over space? Who will gain and lose from climate change?
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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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ps5 - Department of Agricultural and Resource Economics...

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