Consider a river found in the city of Whitehorse, and then answer the questions
ID: 1102965 • Letter: C
Question
Consider a river found in the city of Whitehorse, and then answer the questions that follow The city has a resort whose visitors use the river for recreation. The industrial waste into the river. This pollutes the river and makes it a less desirable vacation destination. That is, the chemical plant's waste decreases the resort's economic profit. city also has a chemical plant that dumps Suppose that the chemical plant 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 resort would no longer be affected. If the chemical plant uses the recycling method, then the chemical plant's economic profit is $2,000 per week, and the resort's economic profit is $2,900 per week. If the chemical plant does not use the recycling method, then the chemical plant's economic profit is $2,700 per week, and the resort'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 chemical plant's economic profit and the resort's economic profit combined) with and without recycling Chemical Plant (Dollars) 2,700 2,000 Profit Resort (Dollars) 1,900 2,900 Total (Dollars,) Action No Recycling Recycling Total economic profit is highest when the recycling production method is not used 00 When the chemical plant uses the recycling method, the resort earns $2 Therefore, the resort should be willing to pay up to $1,000 per week for used plant to recycle water. However, the recycling method decreases the chemical plant's economic profit by $2,700-$2,000= $700 per week. Therefore, the chemical plant should be willing to use the recycling method if it is compensated with at least $700 per week. $1,000 more per week than it does with no recyclingExplanation / Answer
1) Total Profit from No Recycling = 2700 + 1900 = 4600
2) Total profit from Recycling = 2000 + 2900 = 4900
3) Used
4) Not use the Recycling method ; between $ 300 and $ 700
5) Not use the Recycling method; between $ 700 and $ 1000
6) Property right is in favor of resort.
7) False