Suppose Kevin and Sara Are the Only Inhabitants of an Island

question 19

Essay

Suppose Kevin and Sara are the only inhabitants of an island with no butterfly species. Butterfly species are a public good that can be purchased for the island. Kevin would pay up to $90 for the first butterfly species, $40 for the second butterfly species, and nothing for any additional butterfly species. Sara would pay up to $60 for each butterfly species up to a quantity of five.
On the graphs below, draw the demand curves for butterfly species for Kevin, Sara, and the market. Label each axis and the (specific numerical) height of each demand curve for each quantity up to 5 butterfly species.
If butterfly species cost $95 each, what is the socially optimal quantity of butterfly species? __________

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Definitions:

Cuneiform

Latin, “wedge-shaped.” A system of writing used in ancient Mesopotamia, in which wedge-shaped characters were produced by pressing a stylus into a soft clay tablet, which was then baked or otherwise allowed to harden.

Pictography

The use of pictorial symbols or drawings to convey language and ideas, predating traditional writing systems.

Ashurnasirpal II

An Assyrian king known for his expansive building projects, including the palace at Nimrud and many reliefs depicting his conquests and hunting exploits.

Kalhu

An ancient city that served as the capital of the Assyrian Empire under the reign of Ashurnasirpal II; also known as Nimrud in modern times.