Question

The U of C graduating class of 2019 elects to give Hyde Park a tiny zoo with two adorable pandas. The zoo and pandas cost a total of 10 million dollars. There is no admission charge, and the equilibrium line length to see the pandas is 10 minutes. Professor Landsburg* visits the campus, and he notes that instead of going to see the pandas, Hyde Park residents always have the option of going to the lakeside, which is large enough to comfortably serve all potential patrons. Professor Landsburg claims that if instead of building the zoo and acquiring the pandas, the 2019 graduates "had spent $10 million to purchase gold bullion and throw it in the ocean [lake?], the residents would be no worse off than they are today." Please explain, carefully but briefly, the reasoning thatleads to Landsburg’s conclusion of the futility of such efforts to improve Hyde Park.

Answer 1

Going to Zoo with pandas or visiting the Lake are equally preferred by the students. Hence, Lake is perfect substitutes for Zoo. Now spending 10 Million dollar is wastage of money. If students throw bullion worth 10 million dollar into lake, Then we can say that now there is no difference between building zoo or throwing bullion coin into the lake.