01 Jun Question Economics 3B03 – Assignment 4 (Winter 2014)
Question
Answer all questions.
A heard of mammoths has size st and net natural growth gt, where
1. Find the steady state size of the herd.
2. Suppose that a tribe of cavemen led by the mighty Alley Oop discovers the herd. Alley Oop is a powerful leader who can unilaterally determine the amount of mammoth hunting done by the tribe. Being a graduate of MIT (Mesolithic Institue of Technology), Alley Oop always maximizes current profits. The catch ytassociated with a hunt of size htis
Yt= .02gtht
And the cost of hunt is
Find the stady state size of herd under Alley Oop’s leadership.
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