9:46 * 39%. \" Back mmW Apply Ch1-4.cdfBA ooo Apply the Concepts: Chapter 1 1. T

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9:46 * 39%. " Back mmW Apply Ch1-4.cdfBA ooo Apply the Concepts: Chapter 1 1. The Cost of an Expedition. The 6 members of the BukoUlo tribe members differ in their productivity in harvesting coconuts: 1 coconut harvested per day for worker one, 2 coconuts per day for worker two, and so on up to 6 coconuts per day for The tribe will choose 2 people to serve as scouts in a one-day expedition to explore the island a. Suppose the tribe randomly picks two members to serve as scouts, and pays each scout 1 coconut. The economic cost of an expedition could be as low worker six. gh as--- coconuts. b. Suppose the tribe switches to a voluntary system to get scouts. The tribe pays the market-clearing wage, defined as the wage just high enough that 2 workers will voluntarily serve as scouts. The market-clearing wage is l the economic cost of an expedition is _..l coconuts. l coconuts and FlipView["verify numbers", Background LightBlue, FrameMargins -> 5] a, 3, 11 b, 3 2. Driving Speed and Speed Limit. Suppose that for the typical driver, the marginal benefit of driving speed is constant at MB = 5 utils per mph. As speed increases, the expected cost associated with an accident increases at an increasing rate, and the marginal cost of speed is MC(s) s/12, where s is

Explanation / Answer

Question 1

A) since any two people can be picked to work as scouts , so if 1st & 2nd person is selected then their will be total loss of 1+2= 3 coconuts per day

& If 5th &6 th individuals are selected then total cost of their employment is that we have to give up 5+6 = 11 coconuts

Thus minimum Economic cost is 3 & max is 11.

b) now at equilibrium, market wage should be 3 coconuts

Bcoz then 1st individual will for sure, voluntarily work as scout bcoz he gets only 1 coconut daily ( in accordance with his productivity) &

Then since second person has productivity of 2 coconuts , so he will be indifferent , & assuming that he will readyto work as scout

Then the Economic cost of their hiring is again loss of their combined productivity that is 1+2 = 3 coconuts

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