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Safari File Edit View History Bookmarks Window Help ng.cengage.com MINDTAP Homework (Ch 10) Attempts: 8. The effects of property rights on achieving efficiency Consider a lake found in the village of Sturbridge, and then answer the questions that follow Average: 16 The village has a hking lodge whose visitors use the lake for recreation. The village also has a tannery that dumps ndustrial waste into the lake. This pollutes the lake and makes it a less desirable vacation destination. That is, the tannery's waste decreases the hiking lodge's economic profit. Suppose that the tannery could use a different production method that involves recycling water. This sate for recreation, and the hiking lodge would no longer 1,300 per week, and the hiking lodge's economic profit is $2,300 per week. If the tannery economic profit is $2,100 per week, and the hiking lodge's economic profit is $1,100 per week. These figures are summarized in the following table. would reduce the pollution in the lake to levels be affected. If the tannery uses the recycling method, then the tannery's economic profit is does not use the recycling method, then the tannery's

Explanation / Answer

a) Total profits when no recycling = 2100 +1100 = $ 3200

total profits when recycling = 1300+2300 = $3600

b) used.

c) not use the recylicng method

d) upto $1200

e) use the recycling method.

f) upto $800

g) it has property right to clean it.

h) False.

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