slope,so additional effort must be made to increase the catch.Since the social cost curve has a positive slope,the socially effcient catch also increases.We may determine the socially efficient catch by solving the following two equations simultaneously: 0.50.0.0064F=5.645+0.6509F.orF=9.35. To determine the price that consumers are willing to pay for this quantity, substitute F*into the equation for marginal social cost and solve for C: C=-5.G15+(0.G509)9.35).orC=$0.44. Next.find the actual level of production by solving these equations simultaneously: Demand: C=0.50.0.0064F MPC: C=.0.357+0.0573F 0.50.0.0064F=-0.357+0.0573F,0rF=13.45 To determine the prie that willing topay for this quantity substituteinto the equationfor marginalprivate cost and solve for C C=-0.357+(0.057313.45.orC=80.41, Notice that the marginal social cost of producing 13.45 units is MSC=5.645+0.650913.4=$3.11 With the increase in demand,the social cost is the area of a triangle with base of 4.1 million pounds (13.45-9.35)and a height of $2.70($3.11-0.41). or $5,535,000 more than the social cost of the original demand. 11.The Georges Bank.a highly productive fishing area off New England.can be divided into two zones in ter s of fish population.Zone 1 has the higher on mile but is subject toevere diminishing returns to fishing F,=200X)-2X,) where X is the number of boats fishing there.Zone 2 has fewer fish per mile bu is larger,and diminishing returns are less ofa problem.Its daily fish catch is F,=100X-X) where X:is the number of boats fishing in Zone 2.The marginal fish catch MFC in each zone can be represented as MFC1=200-4) MFC2=100-20) There are 100 boats now licensed by the U.S.government to fish in these two zones.The fish are sold at $100 per ton.Total cost (capital and operating)perslope, so additional effort must be made to increase the catch. Since the social cost curve has a positive slope, the socially efficient catch also increases. We may determine the socially efficient catch by solving the following two equations simultaneously: 0.50 - 0.0064F = -5.645 + 0.6509F, or F* = 9.35. To determine the price that consumers are willing to pay for this quantity, substitute F* into the equation for marginal social cost and solve for C: C = -5.645 + (0.6509)(9.35), or C = $0.44. Next, find the actual level of production by solving these equations simultaneously: Demand: C = 0.50 - 0.0064F MPC: C = -0.357 + 0.0573F 0.50 - 0.0064F = -0.357 + 0.0573F, or F** = 13.45. To determine the price that consumers are willing to pay for this quantity, substitute F** into the equation for marginal private cost and solve for C: C = -0.357 + (0.0573)(13.45), or C = $0.41. Notice that the marginal social cost of producing 13.45 units is MSC = -5.645 +(0.6509)(13.45) = $3.11. With the increase in demand, the social cost is the area of a triangle with a base of 4.1 million pounds (13.45 - 9.35) and a height of $2.70 ($3.11 - 0.41), or $5,535,000 more than the social cost of the original demand. 11. The Georges Bank, a highly productive fishing area off New England, can be divided into two zones in terms of fish population. Zone 1 has the higher population per square mile but is subject to severe diminishing returns to fishing effort. The daily fish catch (in tons) in Zone 1 is F1 = 200(X1 ) - 2(X1 ) 2 where X1 is the number of boats fishing there. Zone 2 has fewer fish per mile but is larger, and diminishing returns are less of a problem. Its daily fish catch is F2 = 100(X2 ) - (X2 ) 2 where X2 is the number of boats fishing in Zone 2. The marginal fish catch MFC in each zone can be represented as MFC1 = 200 - 4(X1 ) MFC2 = 100 - 2(X2 ). There are 100 boats now licensed by the U.S. government to fish in these two zones. The fish are sold at $100 per ton. Total cost (capital and operating) per