8. The effects of property rights on achieving efficiency Consider a river found

Question

8. The effects of property rights on achieving efficiency Consider a river found in the city of Philadelphia, and then answer the questions that follow.

Consider a river found in the city of Philadelphia, and then answer the questions that follow. The city has a campground whose visitors use the river for recreation. The city also has a research lab that dumps industrial waste into the river. This pollutes the river and makes it a less desirable vacation destination. That is, the research lab's waste decreases the campground's economic pruiit. Suppose that the research lab could use a different production method that involves recycling water. This would reduce the pollution in the river 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 $2,000 per week, and the campground's economic profit is $2,900 per week. If the research lab does not use the recycling method, then the research lab's economic profit is $2,700 per week, and the campground's economic profit is $1,900 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.

Explanation / Answer

1) Total Profit from No Recycling = 2700 + 1900 = 4600

2) Total profit from Recycling = 2000 + 2900 = 4900

3) Adopted or used

4) not use the Recycling method ; pay $ 700 per week

5) not use the Recycling method; pay $ 1000 per week

6) Property right is in favor of Research lab or Research lab has the property right

7) False

Related Questions

Navigate

• Browse (All)
• Browse 8
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.