Question

iv. How much Net Benefit would society lose by ignoring the external Costs and harvesting gold at the rate you found in question ii instead of the socially optimal rate you found in question i? V. Describe a command-control policy option to correct the externality. vi. Describe an incentive policy option to correct the externality. 3. Suppose TTU expands northward across 12th street. The gas station across the street can now expect to gain an additional $40,000 annual profit in perpetuity. a. How will this affect the market price of the property where the gas station sits if the discount rate is 3%? (Show your work. I'm looking for a specific number as part of your answer)

Answer 1

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