Suppose that owing to discoveries in the Gulf of Mexico we expect a rapid increase in oil tanker traffic in our vicinity. It raises the prospect of oil spills that will negatively affect the local economy and people in Ft. Myers. Using statistical techniques, it is determined that the expected occurrence is one spill over two decades. Steps to avert this spill cost $500 million in net present value terms and is to be borne by the Ft. Myers households. The deleterious effects of the spill will persist over one year. Your responsibility is to evaluate the merit of implementing these steps. 1. What are the categories of value that Ft. Myers households' put on having the Gulf of Mexico free from an oil spill? Explain with example. (65% if only this part is answered to my satisfaction) 2. What are the different valuation methods available? Please discuss each outlining salient features and shortcomings. (90%) 3. At what aggregate willingness to pay will steps to avert the spill make economic sense? (100%) Suppose that owing to discoveries in the Gulf of Mexico we expect a rapid increase in oil tanker traffic in our vicinity. It raises the prospect of oil spills that will negatively affect the local economy and people in Ft. Myers. Using statistical techniques, it is determined that the expected occurrence is one spill over two decades. Steps to avert this spill cost $500 million in net present value terms and is to be borne by the Ft. Myers households. The deleterious effects of the spill will persist over one year. Your responsibility is to evaluate the merit of implementing these steps. 1. What are the categories of value that Ft. Myers households' put on having the Gulf of Mexico free from an oil spill? Explain with example. (65% if only this part is answered to my satisfaction) 2. What are the different valuation methods available? Please discuss each outlining salient features and shortcomings. (90%) 3. At what aggregate willingness to pay will steps to avert the spill make economic sense? (100%)