# P7 - open access ﬁshery to choose the rent maximizing...

This preview shows page 1. Sign up to view the full content.

EC314-Fall 2010 Problem Set 7 Matt Turner When you write up your answers, your goal should be to (1) be correct, and (2) convince your reader that your answer is correct. Answers which do not achieve these goals will not be awarded full credit. To accomplish the second objective, it is helpful if your work is legible and if all steps are presented, possibly with a line of explanation. Please STAPLE pages together so that we do not lose them. (This problem set updated: 18 August 2010) . Problems 1. Suppose that the growth equation for a stock of ﬁsh is F ( X ) = rX ± 1 - X k ² and the harvesting technology is H = qXE . Further suppose that q = 1, k = 1, r = 2. Let the cost of effort be c and the price of harvested ﬁsh be 1. (a) On a graph which shows ARP, MRP, and MC curves, illustrate the tax which causes an
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: open access ﬁshery to choose the rent maximizing level of effort. (b) On a graph which shows AC and MC Curves, illustrate the tax which causes an open access ﬁshery to choose the rent maximizing level of effort. (c) On a graph which shows Total revenue and Total Cost Curves, illustrate the tax which causes an open access ﬁshery to choose the rent maximizing level of effort. (d) Find the optimal tax. (e) Find the optimal quota. 2. List two problems, and explain brieﬂy, with using taxes to manage an open access ﬁshery. 3. List two problems, and explain brieﬂy, with using quotas to manage an open access ﬁshery. 1...
View Full Document

## This note was uploaded on 11/04/2010 for the course ECO 314 taught by Professor Matthewturner during the Spring '08 term at University of Toronto- Toronto.

Ask a homework question - tutors are online