Reginald Enjoys Hunting Whitetail Deer

question 81

Essay

Reginald enjoys hunting whitetail deer. He has a dilemma of deciding each morning where to locate his hunting stand. Reginald would like to choose the location that gives him the deer with the highest Pope and Young score in the smallest amount of time. Reginald will also kill the first deer he sees that offers any Pope and Young score. His utility is a function of the Pope and Young score (b), time in minutes spent hunting (t) and wealth in dollars (w) and is given by If Reginald chooses stand A, he will kill a deer with Pope and Young score of 120 in 300 minutes. If Reginald chooses stand B, he will kill a deer with a Pope and Young score of 190 in 480 minutes. In dollars, how much would Reginald be willing to give up to learn of the outcomes from each stand?

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Definitions:

Marginal Product

The additional output gained by adding one more unit of a specific input, holding all other inputs constant.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a resource, such as labor or capital.

Variable Input

An input whose quantity can be changed in the short term by a firm to adjust the level of output.

Marginal Revenue Product

The additional revenue generated from employing one more unit of a factor of production, like labor or capital.