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Ecological Economics

3)

e) (10)(40)(6)= 1600 units of output the pharmacy produces when it uses 6 units of capital and 40 units of labour.

Couldn’t really draw the graphs on the computer 2 well, so for part f look at page 136
Part g look at page 139

h
L
q
AP(q/L)
MP(change in q/change in L)
0
0
-
-
5
60
12
12
10
140
14
16
15
195
13
11
20
240
12
9
25
275
11
7

Complete the following table using the facts the w=$8 and r=$75
4.
L
K
q
TVC(w*L)
TFC(r*K)
TC(TFC+TVC)
AVC(TVC/q)
AFC(TFC/q)
ATC
MC( change in TC/change in q)
0
10
0
0
750
750
-
-
-
-
5
10
60
40
750
790
.67
12.5
13.17
.67
10
10
140
80
750
830
.57
5.36
5.93
.50
15
10
195
120
750
870
.62
3.85
4.46
.73
20
10
240
160
750
910
.67
3.13
3.79
.89
25
10
275
200
750
950
.73
2.73
3.45
1.14

Question 5- Andrea

Q6

The prevention of resale of products in order to be successful in price discrimination is important because customers who are offered lower prices for products or services should not be able to resell the product at a higher cost to other consumers as this causes loss in total surplus. Additional cost that is incurred by the firm to separate and prevent resale may be greater than the additional revenue that the firms acquire. Resale doesn’t necessary expand output, but may redistribute. Most services cannot be resold. such as dental services, but if products have warranties a manufacturer can void a warranty if a product is resold. Must be able to identify different demand and to prevent resale/arbitrage. If reselling is not prevented the monopolist will be at a lost as its product will be purchased cheaply, resold at an expensive to that will bring profit to the secondary seller of the product.

Q10
An investor is said to be risk averse if he prefers less risk to more risk, all else being equal. Portfolio theory tells us that such an investor will require compensation for taking systematic risk. The opposite...