An Apiary Is Located Next to an Apple Orchard

question 31

Multiple Choice

An apiary is located next to an apple orchard. The apiary produces honey and the apple orchard produces apples. The cost function of the apiary is C_H(H, A) = - 1A and the cost function of the apple orchard is C_A(H, A) = , where H and A are the number of units of honey and apples produced respectively. The price of honey is $5 and the price of apples is $6 per unit. Let A₁ be the output of apples if the firms operate independently, and let A₂ be the output of apples if the firms are operated by a single owner so as to maximize total profit.

• A) A₁ = 300 and A₂ = 350.
• B) A₁ = A₂ = 300.
• C) A₁ = 175 and A₂ = 300.
• D) A₁ = 150 and A₂ = 300.
• E) A₁ = 250 and A₂ = 300.

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Definitions:

Superego

Part of the human psyche, according to Freudian theory, that represents internalized ideals and provides standards for judgment (the conscience) and for future aspirations.

Collective Unconscious

A concept proposed by Carl Jung that refers to the part of the unconscious mind which is derived from ancestral memory and experience and is common to all humankind.

Personal Unconscious

A component of Jung’s analytical psychology, referring to all information that is present within an individual's mind, but not readily accessible to immediate consciousness.

Carl Jung

A Swiss psychiatrist and psychoanalyst who founded analytical psychology and contributed to the understanding of the psyche, archetypes, and the collective unconscious.