Prove rate of output equates MSB with MSC is efficient in the static sense.: Determine the present value of costs for the following time profile of costs:C0 = 10; C1 = 8; C2 =6; C3 =5 for discount rates of 4 percent and 6 percent. What is the effect of using a higher discount rate?: List some appropriate private and social costs that associate with the following operations:+ A watersupply system in the short run, that is, with its existing system of reservoirs, pumps, and pipes,+ A public park in terms of the number of visitors days accommodated+ Gayal restoration in Cat Tien National Park.We talk about willingness to pay for a good or service. How does the concept apply to an act of strict preservation, in which the flow of traditional good and services from a natural resource is put as zero?Marginal costs curve (for the competitive market) is the supply curve.Explain following statements:MWTP curve is the demand curveMarginal costs curve (for the competitive market) is the supply curve.Explain following statements:MWTP curve is the demand curveMarginal costs curve (for the competitive market) is the supply curve.Explain following statements:MWTP curve is the demand curveMarginal costs curve (for the competitive market) is the supply curve.Explain following statements:MWTP curve is the demand curveMarginal costs curve (for the competitive market) is the supply curve.Explain following statements:MWTP curve is the demand curveMarginal costs curve (for the competitive market) is the supply curve.Explain following statements:MWTP curve is the demand curveMarginal costs curve (for the competitive market) is the supply curve.
Name: Nguyen Huu Dung ID: 1353091031 ASSIGNMENT Question1: Non-use value Goods that people used, not use yet or may be in future ( potential resources) including public goods Such as: pay for reserve a pagoda or temple or protect environment as well Use value Value that people paid for when they use the goods or services directly Such as: buy chickens, vegetable, etc Non- Extractive resources It is available resources, don’t need to exploited activities to use for production Such as: capital, labor, land-use etc Extractive resources Not available and need to be use mining or extractive Such as: petroleum, gases, coal, some type of ore… etc Renewable resources Natural resources can be added time to time, sustainable yield can be use a very long-term ( forever) through some natural process or biological reproductions Such as: solar, geothermal ,wind …etc Non-renewable resources Natural resources can “not” added or reproduction, not sustainable, limitation Natural goods Goods that from natural sources ( exploited, processing and sell products) Such as: honey, medicine from plants, furniture… etc Natural services Some kind of services either based on and has business active on natural infrastructure Such as: eco-tourism, some national park …etc Natural resource economics Natural resource economics research on relationship: natural resources benifit within sustainable economics developement in future Environment economics Focus on relationship between economics and environment issues Public goods Goods that is both non-excludable and nonrivalrous no more competion, something user not have to pay for Such as: knowledge, education, languages, etc Such as: petroleum, gases, coal, some ore…etc Private goods Excludable and rivalrous Where private property can exist Has competition, had everything but nothing free Such as: fashion goods, medicine etc QUESTION 2: We talk about willingness to pay for a good or service How does the concept apply to an act of strict preservation, in which the flow of traditional good and services from a natural resource is put as zero? ANSWER : in the preservation, some act of them like in-situ and ex-situ more specialy in-itu , so many national park and some services was built up to exploit benifit of natural resources, like ecotourism to develope ecomics and either conserved natural resources sustainable way Other side it also keep on culture and develope its value of local traditional value Some examples for this problem to show how we still apply this: Some activities like summer caping of a high school, a resort as well, etc people who use this services or may be goods from natural resources like souvenir and something like that willing to pay for this type of good and services QUESTION 3: Determine whether it is a public good or private good for the following goods/ services: a movies theater a public telephone a light house a bus the music you are playing on your stereo ANSWER: - - - - - A movie theater: Public goods Because you have to pay for tickets, not for infrastructure A public telephone: a private goods like a semi-public service because you always have to pay for whether you want to use thought any using level, however in other side, for example : this one use public telephone not effect another one else and its value other use, this side show that meant to be it is a public goods or service but was sell with private to be like private bussiness to get profit Like internet now,cheap and carry public property,interesting and trendy with consumption A light house: private goods Because you have to pay to buy, between light house firms have perfect competition on market A bus: Private goods Because you have to pay for tickets ,has competittion between firms The music you are playing on your stereo: public goods Because nobody tell you have to pay for it Everyone can hear (use) it, same value with everybody, independent to another user QUESTION 4: Prove the following expressions: - The present value of a future stock, discrete discounting: S0 = St/(1+r)t - The present value of a future stock, continues discounting: S0 = St/ert - The present value of a stream of constant future values: - The present value of a never ending (perpetual, infinite) flow of constant future values: PV = FV/r ANSWER: - - S0 = St/(1+r)t we have respective in order to S1=S/(1+r)1 similar with S2=S1/(1+r)2 Prove that: S0 = St/ert we have S0 =St/(1+ ) nt with x= lead to be: n= x.r We also have = [(1+ )x]rt = ert So it proved that: S0 = St/ert - Prove that function : - Prove that function PV = FV/r: We have : PV= FV [�−(�+�) we have: when the value of t bigger and bigger to extreme positive so on value of function: So we have: PV and nearby zero = QUESTION 5: Explain following statements: - MWTP curve is the demand curve Marginal costs curve (for the competitive market) is the supply curve ANSWER: - When we say that MWTP is the Demand curve we have to known that they have closed relationship to each other because that willing to pay that mean with lower price, the consumption always willing to pay with lower price and stay on that market and otherwise, with higher price that increased price, the consumer will leave that market for products I mentioned on, same that they not willing to pay with that higher price So on Figure 5.1 show that demand curve have the same trendy with MWTP because it meant to be with higher price that consumer not willing to pay and demand from them decline at the same time and otherwise, with lower price, demand increased also consumer accept for this price which market take into Figure 5.1 Relationship between MWTP and Demand - A perfectly competitive firm in short-run maximizes profit by producing the quantity of output where marginal revenue (marginal revenue = price in a perfectly competitive firm) equals marginal cost A perfectly competitive firm's supply curve is the portion of its marginal cost curve that lies above the minimum of the average variable cost curve, because if the marginal cost curve was lower than the average variable cost curve, the firm would just shut down A firm produces by moving along its supply curve, which in a perfectly competitive firm is the same as its marginal cost curve Therefore, in individual firms in a perfectly competitive market, the graphs of market supply and marginal cost are the identical The supply curve is derived from the portion of the marginal cost curve that is above the average variable cost curve ( Figure 5.2) Because the marginal cost curve is positively sloped due to the law of diminishing marginal returns, so too is the firm's supply curve And because all firms in a perfectly competitive industry have positively-sloped marginal cost curves, the market supply curve for the entire industry is also positively sloped The fact that market supply and marginal cost are the same, only holds true in the short run Figure 5.2.Total apple yield of Jonathan’s Farm QUESTION 6: List some appropriate private and social costs that associate with the following operations: + A water-supply system in the short run, that is, with its existing system of reservoirs, pumps, and pipes, + A public park in terms of the number of visitors days accommodated + Gayal restoration in Cat Tien National Park ANSWER: QUESTION 7: Determine the present value of costs for the following time profile of costs: C0 = 10; C1 = 8; C2 =6; C3 =5 for discount rates of percent and percent What is the effect of using a higher discount rate? ANSWER: QUESTION 8: Prove that the rate of output that equates MSB with MSC is efficient in the static sense ANSWER: respectively, as the marginal social cost (MSC) and marginal social benefit (MSB) curves When a purely competitive industry is in a long run equilibrium, quantity supplied equals quantity demanded (this is the profit maximizing quantity) and therefore marginal social cost equals marginal social benefit (MSC = MSB), this is the allocated efficient quantity The industry is producing where the marginal social benefit from the last unit produced is just equal to the marginal social cost of the resources needed to produce that unit of product (Figure 8.1 ) Figure 8.1 Relationship between equilibrium and MSC< MSB So on example for not at equilibrium point in a long-run , MSC and MSB that marginal social benefit and marginal social cost that profit not at maximizing quantity It mean that at lower and higher point of equilibrium point they can not maximize profit as well ( Figure 8.2 ) show that price at and MSB equal to 10 that maximum equal to 38 of profit meant to be equilibrium point and respectively at higher point that price at 10 equal to 26 and at lower point price at equal to 32 We can see at price is profit is maximum meant to be rate of Price 10 Quantity 10 12 MSB 14 12 10 output ( quantity) so when MSB = MSC efficient in the static sense QUESTION 9: How would the inter-temporally efficient time path of output be effected by a zero discount rate ANSWER: QUESTION 10: A small community has discovered a mineral deposit within its borders How can the community extract this deposit sustainably? ANSWER: Firstly, they have to pay for resource rent money to be licensed to extract this mineral deposit within border from government They also have to pay for “user costs” and based on it to get more profit from power of attorney for extractive activities Because user costs not willingness to pay for idle or not use (extraction) so on fact identifying and measuring (or collecting)” resource rent” as abnormal or supernormal profit is not straightforward difference between the price at which an output from a resource can be sold and its respective extraction and production costs At any point in time, rent depends on the availability of information, market conditions, technology and the system of “property rights” used to government access to and management of resources Secondly, It is to easy to the community would invest resource rents from extraction in another form of capital accept to get profit after pay for labor, capital, technology,…etc However, to extractive on sustainably way and for future on so far the community capital needed to be “invest” on trust fund and so that future generations can enjoy the benefits of the extracted that mineral deposit In other side, the community have to invest in other natural resource capital (renewable resources) and invest on capital like labor, technology etc to offset decline of stock in which extracted ... willing to pay for this type of good and services QUESTION 3: Determine whether it is a public good or private good for the following goods/ services: a movies theater a public telephone a light... this problem to show how we still apply this: Some activities like summer caping of a high school, a resort as well, etc people who use this services or may be goods from natural resources like souvenir... about willingness to pay for a good or service How does the concept apply to an act of strict preservation, in which the flow of traditional good and services from a natural resource is put as