Question

In: Economics

The environmental protection agency of a county would like to preserve a piece of land as...

The environmental protection agency of a county would like to preserve a piece of land as a wilderness area. The current owner has offered to lease the land to the county for 20 years in return for a lump-sum payment of $1.1 million, which would be paid at the beginning of the 20-year period. The agency has estimated that the land would generate $110,000 per year in benefits to hunters, bird watchers, and hikers. Assume that the lease price represents the social opportunity cost of the land and that the appropriate real discount rate is 4 percent.

a. Assuming that the yearly benefits, which are measured in real dollars, accrue at the end of each of the 20 years, calculate the net benefits of leasing the land.

b. Some analysts in the agency argue that the annual real benefits are likely to grow at a rate of 2 percent per year due to increasing population and county income. Recalculate the net benefits assuming that they are correct.

c. Imagine that the current owner of the land was willing to sell the land for $2 million. Assuming this amount equaled the social opportunity cost of the land, calculate the net benefits if the county were to purchase the land as a permanent wildlife refuge. In making these calculations, first assume a zero annual growth rate in the $110,000 of annual real benefits; then assume that these benefits grow at a rate of 2 percent per year.

Solutions

Expert Solution


Related Solutions

The environmental protection agency of a county would like to preserve a piece of land as...
The environmental protection agency of a county would like to preserve a piece of land as a wilderness area. The current owner has offered to lease the land to the county for 20 years in return for a lump sum payment of $1.1 million, which would be paid at the beginning of the 20- year period. The agency has estimated that the land would generate $110,000 per year in benefits to hunters, bird watchers, and hikers. Assume that the lease...
The environmental protection agency of a county would like to preserve a piece of land as...
The environmental protection agency of a county would like to preserve a piece of land as a wilderness area. The current owner has offered to lease the land to the county for 20 years in exchange for a lump-sum payment of $1.1 million, which would be paid at the beginning of the 20-year period. The agency has estimated that the land would generate $110,000 of annual real benefits to hunters, bird watchers and hikers. Assume that the lease price represents...
1) The Environmental Protection Agency was created in 1970 to mount a coordinated attack on environmental...
1) The Environmental Protection Agency was created in 1970 to mount a coordinated attack on environmental problems. Its duties primarily include Multiple Choice providing financial assistance to the private sector to find alternative sources of energy. assisting state and local pollution control efforts. assessing fines against businesses for violating the Environmental Protection Act. drafting agreements between the United States and its trading partners concerning the environmental effects of international trade. 2) The Clean Air Act of 1990 has all but...
An environmental chemist working for the Environmental Protection Agency (EPA) was directed to collect razor clams...
An environmental chemist working for the Environmental Protection Agency (EPA) was directed to collect razor clams from a heavily-contaminated river superfund site and analyze them for their Cd2 content using graphite furnace atomic absorption spectrometry (GFAAS). The chemist dried the clams at 95° C overnight and ground them in a scientific blender, resulting in approximately 50 g of homogenized dry weight. A representative 69.58 mg sample was taken from the approximately 50 g of dry material and dissolved in 100.0...
An environmental chemist working for the Environmental Protection Agency (EPA) was directed to collect razor clams...
An environmental chemist working for the Environmental Protection Agency (EPA) was directed to collect razor clams from a heavily-contaminated river superfund site and analyze them for cadmium (Cd2 ) content using graphite furnace atomic absorption spectrometry (GFAAS). The chemist dried the clams at 95° C overnight and ground them in a scientific blender, resulting in ~ 50 g of homogenized dry weight. A representative 91.65 mg sample was taken from the ~ 50 g of dry material and dissolved in...
An environmental chemist working for the Environmental Protection Agency (EPA) was directed to collect razor clams...
An environmental chemist working for the Environmental Protection Agency (EPA) was directed to collect razor clams from a heavily-contaminated river superfund site and analyze them for cadmium (Cd2 ) content using graphite furnace atomic absorption spectrometry (GFAAS). The chemist dried the clams at 95° C overnight and ground them in a scientific blender, resulting in ~ 50 g of homogenized dry weight. A representative 91.65 mg sample was taken from the ~ 50 g of dry material and dissolved in...
An environmental chemist working for the Environmental Protection Agency (EPA) was directed to collect razor clams...
An environmental chemist working for the Environmental Protection Agency (EPA) was directed to collect razor clams from a heavily-contaminated river superfund site and analyze them for their Cd2 content using graphite furnace atomic absorption spectrometry (GFAAS). The chemist dried the clams at 95° C overnight and ground them in a scientific blender, resulting in approximately 50 g of homogenized dry weight. A representative 73.11 mg sample was taken from the approximately 50 g of dry material and dissolved in 100.0...
An environmental chemist working for the Environmental Protection Agency (EPA) was directed to collect razor clams...
An environmental chemist working for the Environmental Protection Agency (EPA) was directed to collect razor clams from a heavily-contaminated river superfund site and analyze them for cadmium (Cd2 ) content using graphite furnace atomic absorption spectrometry (GFAAS). The chemist dried the clams at 95° C overnight and ground them in a scientific blender, resulting in ~ 50 g of homogenized dry weight. A representative 64.00 mg sample was taken from the ~ 50 g of dry material and dissolved in...
An environmental chemist working for the Environmental Protection Agency (EPA) was directed to collect razor clams...
An environmental chemist working for the Environmental Protection Agency (EPA) was directed to collect razor clams from a heavily-contaminated river superfund site and analyze them for cadmium (Cd2 ) content using graphite furnace atomic absorption spectrometry (GFAAS). The chemist dried the clams at 95° C overnight and ground them in a scientific blender, resulting in ~ 50 g of homogenized dry weight. A representative 64.00 mg sample was taken from the ~ 50 g of dry material and dissolved in...
A method used by the Environmental Protection Agency (EPA) for determining the concentration of ozone in...
A method used by the Environmental Protection Agency (EPA) for determining the concentration of ozone in air is to pass the air sample through a "bubbler" containing sodium iodide, which removes the ozone according to the following equation: O3(g)+2NaI(aq)+H2O(l)→O2(g)+I2(s)+2NaOH(aq) Part A) How many moles of sodium iodide are needed to remove 5.95×10−6 mol O3? Part B) How many grams of sodium iodide are needed to remove 2.1 mg of O3?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT