Assignment
1. If each well is independently operated and well operators are given open access to the aquifer and are only interested in individual profits, between ______and ______ wells will operate.
2. At the open-access equilibrium, _________ gallons of water will be pumped from the aquifer each day. (Please, do not include decimals or commas in your answer)
3. Is the groundwater use at the open-access equilibrium sustainable given the amount of water that is pumped each day and the aquifer recharge rate? Briefly explain
4. At the economically efficient number of wells the total profit is _________ pesos. (Please, do not include decimals, commas or in your answer AND you do not need to convert money in the table as the money in the table is already represented in pesos)
5. What would be the optimal, and economically efficient number of wells?
6. At the economically efficient number of wells, ________ gallons of water will be pumped from the aquifer each day. (Please, do not include decimals or commas in your answer)
7. Is the economically efficient scenario sustainable given the amount of water that is pumped each day and the aquifer recharge rate? Briefly explain.
8. A permit fee is one policy tool that can be used to reduce the number of resource users when an open access problem occurs. The fee increases the marginal cost of production.
Implementing a well permit fee of ______ pesos would increase the marginal cost of operating a well, and would achieve the economically efficient number of wells. (Please, do not include decimals, commas or in your answer)
Attachment:- table.rar