ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- Consider a lake found in the town of Center Barnstead, and then answer the questions that follow. The town has a campground whose visitors use the lake for recreation. The town also has a fish cannery that dumps industrial waste into the lake. This pollutes the lake and makes it a less desirable vacation destination. That is, the fish cannery's waste decreases the campground's economic profit. Suppose that the fish cannery could use a different production method that involves recycling water. This would reduce the pollution in the lake to levels safe for recreation, and the campground would no longer be affected. If the fish cannery uses the recycling method, then the fish cannery's economic profit is $1,500 per week, and the campground's economic profit is $1,800 per week. If the fish cannery does not use the recycling method, then the fish cannery's economic profit is $2,000 per week, and the campground's economic profit is $1,000 per week. These figures are summarized…arrow_forwardExplain why externalities pose a problem for the utilitarian/invisible hand argument in favor of free market/laissez-faire capitalism. Be precise and thorough and use your own wordsarrow_forwardAssume that radio broadcasts are nonrival and nonexcludable. Two people, Artie and Bill, listen to the same radio station during their commute. Each person values the radio station at $3$3 per day. Both Artie and Bill loathe listening to advertisements. Listening to advertisements makes Artie and Bill each worse off by $1.50$1.50 per day. The radio station needs $2$2 per day to continue operating, which it currently earns from advertisers ($2$2 per day is exactly what the airtime is worth to the advertisers). The radio station is considering asking for donations from Artie and Bill and getting rid of the advertising. Artie and Bill can choose to donate to prevent advertisements or not. If only one chooses to donate, he must donate the whole $2$2 to get rid of the ads. If both choose to donate, each pays $1.$1. Assume that both Artie and Bill are each trying to gain the most net benefit possible, and that they do not cooperate with each other. What is the socially efficient way to…arrow_forward
- A market that is efficient in allocating scarce resources to their best use. Which of the following markets is likely to be the most efficient without any government intervention? a) electricity in virginia (hint: Dominion Energy is a monopoly) b) retail market for gasoline c) university education d) internet servicearrow_forwardThere are actually many economic / environmental theories, some now put into practice, that protect the environment for the sake of nature and our future while still being economically productive. Such a strategy is referred to as: Question 1 options: ecologically sustainable culture gesellschaft environmental lag laissez-faire capitalism When it comes to Environmental issues world governments are beginning to recognize that: (Only one answer is true when you complete this sentence) Question 2 options: certain environmental issues such as global warming, deforestation, and overpopulation require regional, if not global, cooperation and dialogue. that someday, somewhere in the world, we will begin to experience serious food and water shortages. the the developing 3rd World countries will have to play a far more important role in world…arrow_forwardThat the free flow of goods and capital creates economies of scale is not necessarily a good thing. Economies of scale encourage increased production which can lead to significant externalities, like pollution. Please provide a counter argument for the above statementarrow_forward
- Which of the following statements is consistent with Charles Tiebout’s concept of competition by individuals voting with their feet? Group of answer choices Individuals elect the politicians that promise to provide them with the desired level of public goods. Individuals move to the community that provides them with the desired level of public goods. Individuals are herd-like and prefer the same level of public goods as their neighbors. Individuals do not understand what public goods are offered in a town until they move there and try it out.arrow_forwardWhich of the following is the best example of a good or service that would be considered non-rival and non-excludable? Select one: a. your breakfast b. a congested interstate highway c. the United States Navy Od. Dr. Craig's breakfastarrow_forward
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