PS3 (version 1) - Moonsung Kim 20431229 EEP C101 / ECON...

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Unformatted text preview: Moonsung Kim 20431229 EEP C101 / ECON C125 Brian Gross ­ Friday 3~4PM 04/16/2009 1 a. g(S)=4S­0.004S^2 Stock 0 100 200 300 400 500 600 700 800 900 1000 Growth/Harvest 0 360 640 840 960 1000 960 840 640 360 0 d. Given Condition Y(Number of Thneed) = g(S) Production Function Y=4S­0.004S^2 d. Production Pos 1200 1000 800 a. Growth Rate and Stock Level 1200 1000 1000 Thneed 600 400 200 800 0 Growth Rate/Harvest 600 0 200 400 Tru 400 200 0 0 0 200 400 600 800 1000 1200 Stock Level Moonsung Kim 20431229 EEP C101 / ECON C125 Brian Gross ­ Friday 3~4PM 04/16/2009 iven Condition (Number of Thneed) = g(S) roduction Function =4S­0.004S^2 e. Once­ler's Indifference Curves 1200 1000 1000 800 600 400 Production Possibility Frontier 200 Thneed 000 800 200 600 0 0 400 200 400 600 800 1000 Truffula Tree 200 g. Lorax's Indifference Curves 1200 0 200 400 600 800 1000 1200 1000 800 600 400 200 0 0 0 200 400 600 800 1000 Truffula Tree 0 Truffula Tree Thneed Moonsung Kim 20431229 EEP C101 / ECON C125 Brian Gross ­ Friday 3~4PM 04/16/2009 ifference Curves 1000 3 a. A 3 5 8 3 5 8 B 0.1 0.1 0.1 0.2 0.2 0.2 Probability Risk 0.1 0.15 0.25 0.1 0.15 0.25 0.02 0.03 0.04 0.06 0.1 0.16 Probability 0.3 0.25 0.2 Probability 600 ruffula Tree 800 1000 1200 0.15 0.1 0.05 0 0.03 0.06 0.16 0.02 0.04 0.1 Risk Probability ference Curves 0 600 ruffula Tree 800 1000 1200 Moonsung Kim 20431229 EEP C101 / ECON C125 Brian Gross ­ Friday 3~4PM 04/16/2009 b. Risk < r 0.02 0.03 0.04 0.06 0.1 0.16 Cul. Probability 0.1 0.25 0.5 0.6 0.75 1 e. Policy goal : Probability( r < 0.03 ) With Old Technology P(r<0.03) = 0.25 Cul. Probability 1 0.9 0.8 0.7 0.6 0.5 Percentile 0.4 0.3 0.2 0.1 0 0.02 0.03 0.04 0.06 0.1 0.16 Risk < r With New Technology P(r<0.03) = 0.6 Cul. Probability c. Expected Risk A B 3 5 8 3 5 8 d. With New Technology A B Probability Risk Expected Risk ul. Probability C 1.5 0.1 0.1 0.01 0 0.1 2.5 0.1 0.15 0.01 0 0.25 4 0.1 0.25 0.02 0.01 0.5 1.5 0.2 0.1 0.03 0 0.6 2.5 0.2 0.15 0.05 0.01 0.75 4 0.2 0.25 0.08 0.02 1 Expected Risk 0.04 Probability Risk Expected Risk ul. Probability C 0.1 0.1 0.02 0 0.1 0.1 0.15 0.03 0 0.25 0.1 0.25 0.04 0.01 0.5 0.2 0.1 0.06 0.01 0.6 0.2 0.15 0.1 0.02 0.75 0.2 0.25 0.16 0.04 1 Expected Risk 0.08 Moonsung Kim 20431229 EEP C101 / ECON C125 Brian Gross ­ Friday 3~4PM 04/16/2009 Probability( r < 0.03 ) Probabilty is less than the policy goal. Probabily exceeds the policy goal. ...
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This note was uploaded on 11/13/2009 for the course ECON 181 taught by Professor Kasa during the Spring '07 term at University of California, Berkeley.

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