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1. The local government spends $100 on improving port facilities to provide sawmills with access to a new market. This results in local sawmills receiving
1. The local government spends $100 on improving port facilities to provide sawmills with access to a new market. This results in local sawmills receiving an extra S200 for their timber but spending an extra $125 on diesel fuel to transport their product to the port. The market value of the extra fuel includes $25 tax which is imposed to discourage consumption of fuel because of its related health effects. Use the above information to work out the values which belong in the areas A, B, C and D of the following table: Net benefits accruing to Referent group Non-referent group Net benefits measured by Market price Net benefits NOT measured by Market 1. The local government spends $100 on improving port facilities to provide sawmills with access to a new market. This results in local sawmills receiving an extra S200 for their timber but spending an extra $125 on diesel fuel to transport their product to the port. The market value of the extra fuel includes $25 tax which is imposed to discourage consumption of fuel because of its related health effects. Use the above information to work out the values which belong in the areas A, B, C and D of the following table: Net benefits accruing to Referent group Non-referent group Net benefits measured by Market price Net benefits NOT measured by Market
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