Lecycling cycling 2,300 1,500 1,600 2,800 economic profit is highest when the recycling production method is the research lab uses the recycling method, the campground earns - $1,600 = $1,200 more per week than it does with no recycling. Therefore, the campground d be willing to pay up to $1,200 per week for the research lab to recycle water. However, the ing method decreases the research lab's economic profit by $2,300 - $1,500 $800 per week. fore, the research lab should be willing to use the recycling method if it is compensated with st $800 per week. ose the campground has the property rights to the lake. That is, the campground has the to a clean (unpolluted) lake. In this case, assuming the two firms can bargain at no cost, the rch lab will the recycling method and will pay the campground per week. suppose the research lab has the property rights to the lake, including the right to pollute it. s case, assuming the two firms can bargain at no cost, the research lab will the ing method, and the campground will pay the research lab per week. esearch lab will make the most economic profit when True False or False: The research lab will use the recycling method, regardless of who has the property

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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No Recycling
Recycling
2,300
1,500
1,600
2,800
Total economic profit is highest when the recycling production method is
When the research lab uses the recycling method, the campground earns
$2,800 $1,600 = $1,200 more per week than it does with no recycling. Therefore, the campground
should be willing to pay up to $1,200 per week for the research lab to recycle water. However, the
recycling method decreases the research lab's economic profit by $2,300 - $1,500 = $800 per week.
Therefore, the research lab should be willing to use the recycling method if it is compensated with
at least $800 per week.
Suppose the campground has the property rights to the lake. That is, the campground has the
right to a clean (unpolluted) lake. In this case, assuming the two firms can bargain at no cost, the
research lab will
the recycling method and will pay the campground
per week.
Now, suppose the research lab has the property rights to the lake, including the right to pollute it.
In this case, assuming the two firms can bargain at no cost, the research lab will
the
recycling method, and the campground will pay the research lab
per week.
The research lab will make the most economic profit when
True
False
True or False: The research lab will use the recycling method, regardless of who has the property
rights.
Transcribed Image Text:No Recycling Recycling 2,300 1,500 1,600 2,800 Total economic profit is highest when the recycling production method is When the research lab uses the recycling method, the campground earns $2,800 $1,600 = $1,200 more per week than it does with no recycling. Therefore, the campground should be willing to pay up to $1,200 per week for the research lab to recycle water. However, the recycling method decreases the research lab's economic profit by $2,300 - $1,500 = $800 per week. Therefore, the research lab should be willing to use the recycling method if it is compensated with at least $800 per week. Suppose the campground has the property rights to the lake. That is, the campground has the right to a clean (unpolluted) lake. In this case, assuming the two firms can bargain at no cost, the research lab will the recycling method and will pay the campground per week. Now, suppose the research lab has the property rights to the lake, including the right to pollute it. In this case, assuming the two firms can bargain at no cost, the research lab will the recycling method, and the campground will pay the research lab per week. The research lab will make the most economic profit when True False True or False: The research lab will use the recycling method, regardless of who has the property rights.
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 research lab that dumps
industrial waste into the lake. This
pollutes the lake and makes it a less
desirable vacation destination. That is,
the research lab's waste decreases the
campground's economic profit.
Suppose that the research lab 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 research lab uses the recycling method, then the research lab's
economic profit is $1,500 per week, and the campground's economic profit is $2,800 per week. If
the research lab does not use the recycling method, then the research lab's economic profit is
$2,300 per week, and the campground's economic profit is $1,600 per week. These figures are
summarized in the following table.
Complete the following table by computing the total profit (the research lab's economic profit and
the campground's economic profit combined) with and without recycling.
Profit
Research Lab Campground
(Dollars)
STT
2,300
1,500
Action
No Recycling
Recycling
(Dollars)
dan
1,600
2,800
Total
(Dollars)
Total economic profit is highest when the recycling production method is
When the research lab uses the recycling method, the campground earns
Transcribed Image Text: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 research lab that dumps industrial waste into the lake. This pollutes the lake and makes it a less desirable vacation destination. That is, the research lab's waste decreases the campground's economic profit. Suppose that the research lab 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 research lab uses the recycling method, then the research lab's economic profit is $1,500 per week, and the campground's economic profit is $2,800 per week. If the research lab does not use the recycling method, then the research lab's economic profit is $2,300 per week, and the campground's economic profit is $1,600 per week. These figures are summarized in the following table. Complete the following table by computing the total profit (the research lab's economic profit and the campground's economic profit combined) with and without recycling. Profit Research Lab Campground (Dollars) STT 2,300 1,500 Action No Recycling Recycling (Dollars) dan 1,600 2,800 Total (Dollars) Total economic profit is highest when the recycling production method is When the research lab uses the recycling method, the campground earns
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