1. Homepage
  2. Exam
  3. ECON 601 - Microeconomics: Theory and Applications - Final Exam - Question 4: Social coordination of public outcomes

ECON 601 - Microeconomics: Theory and Applications - Final Exam - Question 4: Social coordination of public outcomes

This question has been solved
Contact Us On WeChat

Economics 601 -Microeconomics: Theory and Applications CourseNana.COM

Final Exam CourseNana.COM


CourseNana.COM

Please answer all questions below. Answers are due as a single document (pdf preferred) on Canvas. Feel free to scan / take photos of hand-drawn answers for math, figures, or diagrams, just make sure to embed them in your answers. Email me if you have any clarifying or similar questions, and good luck! CourseNana.COM


CourseNana.COM

4.     Social coordination of public outcomes (30 points) Consider a classic tragedy of the fishers where two individuals’ actions have negative external effects on each other and also act as substitutes. Assume that individuals lower and Upper are maximizing utility functions: CourseNana.COM

u = α(1 – βE)e e2 and U = α(1 – βe)E E2 CourseNana.COM

4.1.  Derive each individual’s best response function to the other as a function of effort, plot these best response functions in effort space (i.e., e-E axes), draw in corresponding indifference curves, and circle the Nash Equilibrium. CourseNana.COM

4.2.  On the same graphs draw in indifference curves and identify (a) the egalitarian social planner’s optimal choice (b) the outcome when lower has property rights and can make a take-it-or-leave-it offer to Upper to fish the lake for a permit and (c) the outcome when lower gets to choose their fishing effort first. Which of the three is pareto rankable compared to the Nash Equilibrium? Explain. CourseNana.COM

4.3.  Now consider a scenario where fishing has positive externalities and is a complement rather than a substitute. Graph linear best response functions in e-E space, show the Nash equilibrium, graph indifference curves for each of the three scenarios a,b,c in question 4.2 and comment on the welfare outcomes for first vs. second movers in part (c) relative to the Nash Equilibrium. CourseNana.COM

Get Solution for This Question

Scan above qrcode with Wechat

US代写,University of San Francisco代写,Economics代写,ECON 601代写,Microeconomics代写,Theory and Applications代写,Social coordination of public outcomes代写,Nash Equilibrium代写,US代编,University of San Francisco代编,Economics代编,ECON 601代编,Microeconomics代编,Theory and Applications代编,Social coordination of public outcomes代编,Nash Equilibrium代编,US代考,University of San Francisco代考,Economics代考,ECON 601代考,Microeconomics代考,Theory and Applications代考,Social coordination of public outcomes代考,Nash Equilibrium代考,UShelp,University of San Franciscohelp,Economicshelp,ECON 601help,Microeconomicshelp,Theory and Applicationshelp,Social coordination of public outcomeshelp,Nash Equilibriumhelp,US作业代写,University of San Francisco作业代写,Economics作业代写,ECON 601作业代写,Microeconomics作业代写,Theory and Applications作业代写,Social coordination of public outcomes作业代写,Nash Equilibrium作业代写,US编程代写,University of San Francisco编程代写,Economics编程代写,ECON 601编程代写,Microeconomics编程代写,Theory and Applications编程代写,Social coordination of public outcomes编程代写,Nash Equilibrium编程代写,USprogramming help,University of San Franciscoprogramming help,Economicsprogramming help,ECON 601programming help,Microeconomicsprogramming help,Theory and Applicationsprogramming help,Social coordination of public outcomesprogramming help,Nash Equilibriumprogramming help,USassignment help,University of San Franciscoassignment help,Economicsassignment help,ECON 601assignment help,Microeconomicsassignment help,Theory and Applicationsassignment help,Social coordination of public outcomesassignment help,Nash Equilibriumassignment help,USsolution,University of San Franciscosolution,Economicssolution,ECON 601solution,Microeconomicssolution,Theory and Applicationssolution,Social coordination of public outcomessolution,Nash Equilibriumsolution,