Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Microeconomics Expert

Mining is proposed for a wilderness area that provides two benefits: recreation (due to backpacking opportunities) and biodiversity (there are endangered wildlife and plants). The mining is expected to reduce backpacking visits from the current 10,000 recreation visitor-days (RVDs) per year to 4,000 RVDs per year for the next 10 years; after that time, recreation use would partially rebound to 7,000 RVDs per year into perpetuity. If the mine is not opened, recreational use is expected to continue at current levels into perpetuity. Mining is expected to bring profits of $1 million per year for the 10 years of mining operations.

a. What is the present value of mining in the area (excluding effects on recreation) if the interest rate is 6%? If it is 3%?
b. If one RVD of backpacking is worth $P, what is the present value of recreation in the area if it is mined? If it is not mined? Do this calculation using both a 6% and a 3% discount rate.
c. How much would an RVD of backpacking have to be worth (i.e., what is P) to make the benefits of mining worth less than the benefits of not mining, considering only the benefits and costs of mining and recreation? Do the calculation for both 6% and 3% discount rates.
d. Suppose that travel cost studies determined that an RVD of backpacking in the wilderness is worth $80 per RVD. Would preservation be the efficient solution, considering only the benefits and costs of recreation and mining, at 6% discount rate? At 3% discount rate?
e. Which discount rate makes the best case for mining?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M940343

Have any Question? 


Related Questions in Microeconomics

Assignmentbliss v attorney general of canada was a canadian

Assignment Bliss v. Attorney General of Canada was a Canadian Bill of Rights case. Stella Bliss' claim for maternity benefits (under the former Unemployment Insurance Act) as a form of "equality before the law" was rejec ...

Create the demand and supply of the labor market and demand

Create the demand and supply of the labor market and demand and supply of the goods market using the production function and consumption utility function given. Solving the equations and graphing the models have to be th ...

Question 1the document that lists and details the contents

Question 1 The document that lists and details the contents and conditions of a shipment is called: A. The Tariff B. Proof of Delivery C. The Invoice D. The Bill of Lading Question 2 Declining transport rates as the quan ...

Short paperthus far in the course the primary focus has

Short Paper Thus far in the course, the primary focus has been on hospitals within the healthcare industry. For this short paper you will consider the economic issues related to long-term care facilities. In this assignm ...

Article analysisplease choose an article from the wall

Article Analysis Please choose an article from the Wall Street Joumal, The Economist, Bureau of Labor/Statistics, Bureau of Economic Analysis etc... or any peer reviewed article for the UOP library. Select one subjects f ...

Assignmentwe often have difficulty understanding how our

Assignment We often have difficulty understanding how our own customs and traditions could be viewed any way other than as right. In that regard, cultural relativism (viewing a custom from the other culture's perspective ...

1 a explain in clear language the economic inefficiency

1. a) Explain in clear language the economic inefficiency associated with adverse selection. b) The ACA (aka Obamacare) included an insurance mandate, which forces everyone to purchase insurance or face a penalty. Under ...

Assignmentvisit wwwlovemarkscom and share your thoughts on

Assignment Visit www.lovemarks.com and share your thoughts on Branding and Pricing as it relates.....to "The Future Beyond Brands." Check out the Love/Respect Axis and see just where your favorite brand is sitting. (lmnu ...

The purpose of an assignment is to ensure that the learner

The purpose of an assignment is to ensure that the Learner is able to: - Use methods of enquiry and research in a disciplined field. - Interpret and evaluate text. - Have a sound understanding of key principles and theor ...

Question 1 a scatter diagram is useful to determine if a

Question 1. A scatter diagram is useful to determine if a relationship exists between two variables. True False Question 2. Consider the following gasoline data: Quarter 1, Year 1, Year 2 1, 150, 156 2, 140, 148 3, 185, ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen