Economics 108 Landsburg Homework #8 week of 4/9/13 RECOMMENDED READING: Chapter 11 1. A sherman at Hardin lake can catch 20 sh per day, provided he has the lake to himself. Two sherman can catch 19 sh apiece per day and three can catch 18 sh apiece per day. Other numbers are given by this table: Number of Fishermen Fish per Day per Fisherman 1 20 2 19 3 18 4 17 5 15 6 13 7 10 8 7 9 5 10 3 The opportunity cost of a day at the lake is 7 sh (that is, the alternative activity is as valuable as 7 sh). a) How many shermen come to the lake? How many sh do they catch? What is the social gain from the existence of the lake? (You can measure social gain in sh.) b) What is the optimal number of shermen at the lake? What is the social gain if this optimum is achieved? c) What entrance fee leads to the optimal outcome? 2. Which of the following are non-excludable? Which are non-rivalrous? a) Broadcast TV. b) Cable TV. c) An unfenced meadow where any farmer can bring cows to graze. d) An ice cream cone.