1D. The following information is to be nsedfor Questions I [3, 11, and 1'2 The Canadian Armed Forces proposes to use Massenet Island in Anderson Lake as a target range. The four families who own land around Anderson Lake have proposed to preserve some of the shoreline of Massenet Island, keeping it free of falling shells. The spokesperson for the four families, Sue 1Wrens, informed the government that each family is wling to pay something to preserve the island's shoreline. Each family's willingness-to-pay depends on the amount of shoreline preserved, and Ms. Vrens has determined that each willingness-to-pav function is Pk} = 115 Illa]: where: k represents kilometers of shoreline {km.) preserved. The total cost of preserving shoreline is derived from the cost to the Canadian Forces of creating another range elsewhere, and is represented by TC{k} = 50K]: + 15K]:1 What is the Pareto-efcient amcmnt of shoreline to preserve? Fewer than 10 km. At least 1!] km. but fewer than 20 km. At least 20 km. but fewer than 50 km. At least 50 km. but fewer than 100 km. At least 100 km. P1905\"? 11. What is the gross benefit to a typical family from preserving the optimal amount of shoreline? A. Less than $1,400. B. At least $1,400 but less than $2,100. C. At least $2,100 but less than $2,800. D. At least $2,800 but less than $3,500. E. At least $3,500. 12. What is the net benefit to all four families from preserving the optimal amount of shoreline? A. Less than $5,000. B. At least $5,000 but less than $7,500. C. At least $7,500 but less than $10,000. D. At least $10,000 but less than $12,500. E. At least $12,500.The following information is to be used for Questions 13 and 14 The tin producer GeorgesRemi, S.A. has acquired rights to a deposit of tin in Peru. According to the company geologists, there are 125,000 units of tin in the deposit. The estimate of the cost of extraction and smelting of the tin in each period is C(Y.) = 50 x Y, + 0. 001 x Y;, where Y, represents number of units of tin extracted/smelted in period 't =0, 1, 2...' The world market price of a unit of tin is $150. This is not expected to change for at least five years. The return (proxy for interest rate) that GeorgesRemi, S.A. can earn on its other assets around the world is 5%. 13. If GeorgesRemi, S.A. has a only a two-year lease on the deposit in Peru, how much of the tin will it abandon at the end of the lease? A. Fewer than 10,000 units. B. At least 10,000 units but fewer than 20,000 units. C. At least 20,000 units but fewer than 30,000 units. D. At least 30,000 units but fewer than 40,000 units. E. At least 40,000 units (40,000 or more). 14. Which of the following changes will REDUCE the amount of tin ultimately abandoned (will INCREASE the amount extracted) from the deposit in Peru? A. Lease on the deposit increased from two years to four years. B. Price of tin falls to $120/unit. C. Return on other assets (interest) increases to 10%. D. Return on other assets (interest) decreases to 3% E. Cost of extraction/smelting rises to C(Y,) = 50 x Y, + 0.002 x Y)
