Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Refining raw gold ore to remove impurities and concentrate gold content usually involves caustic chemicals. One method involves dissolving the gold with a concentrated cyanide

Refining raw gold ore to remove impurities and concentrate gold content usually involves caustic chemicals. One method involves dissolving the gold with a concentrated cyanide solution. The concentrations of cyanide used in this process are extremely dangerous, and if spilled into the environment, pose a significant threat to wildlife and human health.

A city has hire you to a CBA for a Gold mine and processing facility bound to be to installed between the county limits. They promise to keep any cyanide solution in safe storage and dispose of it without any risk to the local population. Nevertheless, the city council wishes for you to analyze the possible impact of a spillover of the pollutant.

You have gather all the relevant information that would allow you to carry out your analysis except for one, the shadow price for a kilogram of spilled cyanide solution. You don't have a proper budget to calculate this variable, luckily your research team has found four other analysis that computed the cyanide's shadow price. You make a list of similarities and differences between those analysis' cities and your city of interest:

study A B C D city of interest

shadow price 100 400 500 3000 -

%of farming land ("farm") 5% 80% 30% 70% 50%

proximity to closest city ("prox") 200km 100km 150 50 150

population of closest city ("pop") 50k 10k 800k 300k 700k

  1. Calculate the distance for each of the "Study X" cities and the city of interest. Now, imagine that your team decide to weight every study based on the inverse of it's distance with the city of interest (i.e. as a proportion of the sum of all the inverse of distance), what shadow price would you use?
  2. Given your answer on (Q1), do you believe such methodology applies too much importance to any of the three metrics ("farm, prox or pop") over the others? Why?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Marketing

Authors: Shane Hunt

3rd Edition

1260800458, 9781260800456

More Books

Students also viewed these Economics questions

Question

solve

Answered: 1 week ago

Question

Conduct a "Run Test" on the quarterly changes in the level of the S

Answered: 1 week ago

Question

2. The purpose of the acquisition of the information.

Answered: 1 week ago

Question

1. What is the meaning of the information we are collecting?

Answered: 1 week ago