An analyst for a municipal public housing agency explained the choice of a discount rate as follows: “Our agency funds its capital investments through nationally issued bonds. The effective interest rate that we pay on the bonds is the cost that the agency faces in shifting revenue from the future to the present. It is, therefore, the appropriate discount rate for the agency to use in evaluating alternative investments.” Comment on the appropriateness of this discount rate.
> (Spreadsheet required.) Imagine that a rancher would have an income of $80,000 if his county remains free from a cattle parasite but only $50,000 if the county is exposed to the parasite. Further imagine that a county program to limit the impact of expos
> Using the scheme shown in Table 14.1, diagram the evaluation design used in each of the following demonstration programs. a. To evaluate a government training program that provides low-income, low-skilled, disadvantaged persons job-specific training, me
> Would you describe this study as a Distributional CBA?
> Consider the example presented in Figure 4.3. Compute the annual loss in consumer surplus for the price increase from $1.25 to $1.75. a. Assume a linear demand curve as per equation (4.7) b. Assume a constant elasticity demand curve as per equation (4.8
> (This question pertains to Appendix 3A; instructor-provided spreadsheet recommended). Imagine a person’s utility function over two goods, X and Y, where Y represents dollars. Specifically, assume a Cobb-Douglas utility function: U(X,Y) = Xa Y(1-a) Wher
> At the current market equilibrium, the price of a good equals $40 and the quantity equals 10 units. At this equilibrium, the price elasticity of supply is 2.0. Assume that the supply schedule is linear. a. Use the price elasticity and market equilibrium
> A person’s demand for gizmos is given by the following equation: q = 6 – 0.5p + 0.0002I where, q is the quantity demanded at price p when the person’s income is I. Assume initially that the person’s income is $60,000. a. At what price will demand fall t
> How closely do government expenditures measure opportunity cost for each of the following program inputs? a. Time of jurors in a criminal justice program that requires more trials. b. Land to be used for a nuclear waste storage facility that is owned
> If you were running a state welfare agency and had to choose one of the programs listed in the table, what information would you like in addition to that provided in the table?
> Let’s explore the concept of willingness to pay with a thought experiment. Imagine a specific sporting, entertainment, or cultural event that you would very much like to attend-perhaps a World Cup match, the seventh game of the World Series, a Bruce Spri
> Many experts claim that, although VHS came to dominate the video recorder market, Betamax was a superior technology. Assume that these experts are correct, so that, all other things equal, a world in which all video recorders were Betamax technology woul
> (Spreadsheet recommended.) Excessive and improper use of antibiotics is contributing to the resistance of many diseases to existing antibiotics. Consider a regulatory program in the United States that would monitor antibiotic prescribing by physicians. A
> Because of a recent wave of jewellery store robberies, a city increases police surveillance of jewellery stores. The increased surveillance costs the city an extra $500,000 per year, but as a result, the amount of jewellery that is stolen falls. Specific
> An analyst for the U.S. Navy was asked to evaluate alternatives for forward-basing a destroyer flotilla. He decided to do the evaluation as a CBA. The major categories of costs were related to obtaining and maintaining the facilities. The major category
> Three mutually exclusive projects are being considered for a remote river valley: Project R, a recreational facility, has estimated benefits of $20 million and costs of $16 million; project F, a forest preserve with some recreational facilities, has esti
> (Spreadsheet recommended) Your municipality is considering building a public swimming pool. Analysts have estimated the present values of the following effects over the expected useful life of the pool: PV (Million dollars)
> The effects of a tariff on imported kumquats can be divided into the following categories: tariff revenues received by the treasury ($8 million); increased use of resources to produce more kumquats domestically ($6 million); the value of reduced consumpt
> Imagine that you live in a city that currently does not require bicycle riders to wear helmets. Furthermore, imagine that you enjoy riding your bicycle without wearing a helmet. a) From your perspective, what are the major costs and benefits of a propose
> CBAs have been conducted of six proposed projects. None of these projects are mutually exclusive and the agency has a sufficient budget to fund those that will make society better off. The findings from the CBAs are summarized here in millions of dollars
> If you were running a state welfare agency and had to choose one of the programs listed in the table, which table’s columns would you particularly focus upon? Why?
> A city is about to build a new sanitation plant. It is considering two sites, one located in a moderately high-income neighborhood and the other in a low-income neighborhood. Indeed, most of the residents in the latter neighborhood live below the poverty
> (Instructor-provided spreadsheet recommended) Two alternative mosquito control programs have been proposed to reduce the health risks of West Nile disease in a state over the next five years. The costs and effectiveness of each program in each of the nex
> Analysts wish to evaluate alternative surgical procedures for spinal cord injuries. The procedures have various probabilities of yielding the following results: Full recovery (FR) — the patient regains full mobility and suffers no chronic pain. Full fu
> A public health department is considering five alternative programs to encourage parents to have their preschool children vaccinated against a communicable disease. The following table shows the cost and number of vaccinations predicted for each program:
> (Instructor-provided spreadsheet recommended.) Assuming that the elasticity of the value of statistical life with respect to income is between 0.5 and 1.2 and that the value of statistical life in the United States is between $4 million and $13 million,
> Analysts estimate that the expansion of the capacity of the criminal courts in a city would require about 7,200 additional hours of juror time. The average wage rate in the county is $15/hour. A recent survey by the jury commissioner, however, found that
> (Instructor-provided spreadsheet recommended.) Suppose a 40-mile stretch of rural road with limited access is used primarily by regional commuters and business travelers to move between two major interstate highways. The legal speed limit on the road is
> A number of residents of Dullsville have complained to the mayor that the center of town looks shabby compared to the centers of many other nearby towns. At the mayor’s request, the Parks Department has put together a proposal for converting the town squ
> The construction of a dam that would provide hydroelectric power would result in the loss of two streams: one that is now used for sport fishing; and another that does not support game fish but is part of a wilderness area. a. Imagine that a contingent
> (Instructor-provided spreadsheet recommended.) Happy Valley is the only available camping area in Rural County. It is owned by the county, which allows free access to campers. Almost all visitors to Happy Valley come from the six towns in the county. Rur
> Imagine that you wanted to use a life-course model similar to the Alzheimer's disease model to estimate the net benefits of helping someone quit smoking. What would be the most important similarities and differences?
> A worker, who is typical in all respects, works for a wage of $50,000 per year in a perfectly safe occupation. Another typical worker does a job requiring exactly the same skills as the first worker, but in a risky occupation with a known death probabili
> Child care services in a small Midwestern city cost $30 per day per child. The high cost of these services is one reason why very few mothers who are on welfare work; given their low potential wages, virtually no welfare mothers are willing to pay these
> Five years ago a community college district established programs in ten new vocational fields. The district now wants to phase out those programs that are not performing successfully and retain those programs that are performing successfully. To determin
> Perhaps the most careful effort to measure the effects of compensatory preschool education was the Perry Preschool Project begun in Ypsilanti, Michigan in 1962. Children, mostly three years old, were randomly assigned to treatment (58 children) and contr
> Consider a government training program that provides low-skilled men job-specific training. To evaluate this program, members of the target population were randomly assigned to either a treatment group that was eligible to receive services under the prog
> An analyst wishing to estimate the benefits of preserving a wetland has combined information obtained from two methods. First, she surveyed those who visited the wetland - fishers, duck hunters, and bird watchers - to determine their willingness to pay f
> Imagine a wilderness area of 200 square miles in the Rocky Mountains. How would you expect each of the following factors to affect people’s total willingness to pay for its preservation? a. The size of the total wilderness area still remaining in the Ro
> Imagine that we want to value a cultural festival from the point of view of a risk-averse person. The person’s utility is given by U (I) where $I is her income. She has a 50 percent chance of being able to get vacation time to attend the festival. If sh
> A large rural county is considering establishing a medical transport unit that would use helicopters to fly emergency medical cases to hospitals. Analysts have attempted to estimate the benefits from establishing the unit in two ways. First, they surveye
> Imagine that the net present value of a hydroelectric plant with a life of 70 years is $25.73 million and that the net present value of a thermal electric plant with a life of 35 years is $18.77 million. Rolling the thermal plant over twice to match the
> What information would be needed to estimate the net benefits of a state-wide Alzheimer's disease screening program for 65 year olds?
> (Use of a instructor-provided spreadsheet recommended for parts a through e, and necessary for part f) A town with a population of 164,250 persons who live in 39,050 households is considering introducing a recycling program that would require residents t
> In exercise (3) the optimal strategy involved testing. Does testing remain optimal if the prevalence of the disease in the population is only .05? Does your answer suggest any general principle? Data from Exercise 3: The prevalence of a disease among a
> The prevalence of a disease among a certain population is 0.40. That is, there is a 40 percent chance that a person randomly selected from the population will have the disease. An imperfect test that costs $250 is available to help identify those who ha
> Use several alternative discount rate values to investigate the sensitivity of the present value of net benefits of the dam in exercise (1) to the assumed value of the real discount rate.
> The initial cost of constructing a permanent dam (i.e., a dam that is expected to last forever) is $830 million. The annual net benefits will depend on the amount of rainfall: $36 million in a “dry” year, $58 million in a “wet” year, and $104 million in
> Assume a project will result in benefits of $1.2 trillion in 500 years by avoiding an environmental disaster that otherwise would occur at that time. a. Compute the present value of these benefits using a time-constant discount rate of 3.5. b. Compute
> Assume the following: Society faces a marginal excess tax burden of raising public revenue denoted METB; the shadow price of capital equals θ; public borrowing displaces private investment dollar for dollar; and public revenues raised through taxes displ
> (Instructor-provided spreadsheet recommended.) The following table gives cost and benefit estimates in real dollars for dredging a navigable channel from an inland port to the open sea. Dredging and Savings to Value of Pleasure Year Patrol Cost
> (Instructor-provided spreadsheet recommended.) New City is considering building a recreation center. The estimated construction cost is $12 million with annual staffing and maintenance costs of $750,000 over the twenty-year life of the project. At the en
> What weaknesses do you see in this CBA? If corrected, would they increase or decrease the expected NPV?
> Imagine that the current owner of the land in the previous exercise was willing to sell the land for $2 million. Assuming this amount equaled the social opportunity cost of the land, calculate the net benefits if the county were to purchase the land as a
> The environmental protection agency of a county would like to preserve a piece of land as a wilderness area. The current owner has offered to lease the land to the county for 20 years in return for a lump-sum payment of $1.1 million, which would be paid
> A town’s recreation department is trying to decide how to use a piece of land. One option is to put up basketball courts with an expected life of 8 years. Another is to install a swimming pool with an expected life of 24 years. The basketball courts wou
> A government data processing center has been plagued in recent years by complaints from employees of back pain. Consultants have estimated that upgrading office furniture at a net cost of $430,000 would reduce the incidence and severity of back injuries,
> A highway department is considering building a temporary bridge to cut travel time during the three years it will take to build a permanent bridge. The temporary bridge can be put up in a few weeks at a cost of $730,000. At the end of three years, it wou
> Imagine that a project involves putting a high-voltage power transmission line near residential property. Discuss how you might predict and monetize its impact on residents.
> Review the following CBA: David L. Weimer and Mark A. Sager, ““Early Identification and Treatment of Alzheimer’s Disease: Social and Fiscal Outcomes,” Alzheimer’s & Dementia 5(3), 2009, 215-226. Evaluate the empirical basis for prediction and monetizatio
> (Instructor-provided spreadsheet recommended) Consider an individual’s utility function over two goods, qm and qs, where m indicates the primary market in which a policy will have its effect and s is a related secondary market: where α, βm, βs, and γ a
> Recall exercise 2 from Chapter 5 in which a country imposes an import fee on the crude oil it imports. Imagine that all the crude oil imports to the country are made by ships owned by its nationals. The Association of Petroleum Shippers argues that the r
> Recall exercise 2 from Chapter 5 in which a country imposes an import fee on the crude oil it imports. Assume that prior to the imposition of the import fee, the country annually consumed 900 million short tons of coal, all domestically mined, at a price
> Why is there no consumer surplus included as a benefit?
> Recall exercise 1 from Chapter 5 in which an increase in the toll on a highway from $.40 to $.50 would reduce use of the highway by 5,000 cars per week. a. Because of the reduced use of the highway, demand in the secondary market for subway rides increa
> (Instructor-provided spreadsheet recommended.) A proposed government project in a rural area with 100 unemployed persons would require the hiring of 20 workers. The project would offer wages of $12 per hour. Imagine that the reservation wages of the one-
> Assume that a typical unskilled rural worker in a developing country would be paid 2 dubyas a week if he migrates to the city and finds a job. However, the unemployment rate for unskilled workers is 40 percent in the city. a. What does the Harris-Todar
> Consider a low-wage labor market. Workers in this market are not presently covered by the minimum wage, but the government is considering implementing such legislation. If implemented, this law would require employers in the market to pay workers a $5 ho
> A country imports 3 billion barrels of crude oil per year and domestically produces another 3 billion barrels of crude oil per year. The world price of crude oil is $90 per barrel. Assuming linear curves, economists estimate the price elasticity of domes
> Suppose the government is considering an increase in the toll on a certain stretch of highway from $.40 to $.50. At present, 50,000 cars per week use that highway stretch; after the toll is imposed, it is projected that only 45,000 cars per week will use
> (Regression software required; instructor-provided spreadsheet recommended.) An analyst was asked to predict the gross social benefits of building a public swimming pool in Dryville, which has a population of 70,230 people and a median household income o
> You are a decision-maker who has to decide whether to adopt the Tulsa IDA program on a permanent basis relying, in part, on the information provided by the CBA described in this case study. a. The case study provides results for a range of distributiona
> (Instructor provided spreadsheet required) How much would the shadow price of a diploma change if the probabilities of high school graduates obtaining no further education, some college, and college graduation were 26 percent, 38 percent, and 36 percent,
> How would the shadow price of a high school diploma change if the labor force participation rate for increase?
> Imagine Washington State is considering implementing a program that pays monetary awards to families when their high school age children meet certain goals (for example, school attendance, achievement on standardized tests, receiving regular dental check
> (a) What is the difference between the pressure of the blood in your brain when you stand on your head and the pressure when you stand on your feet? Assume that you are 1.85 m tall. The density of blood is 1060 kg/m3. (b) What effect does the increased p
> A barrel contains a 0.120-m layer of oil floating on water that is 0.250 m deep. The density of the oil is 600 kg/m3. (a) What is the gauge pressure at the oil–water interface? (b) What is the gauge pressure at the bottom of the barrel?
> In intravenous feeding, a needle is inserted in a vein in the patient’s arm and a tube leads from the needle to a reservoir of fluid (density 1050 kg/m3) located at height h above the arm. The top of the reservoir is open to the air. If the gauge pressur
> (a) Calculate the difference in blood pressure between the feet and top of the head for a person who is 1.65 m tall. (b) Consider a cylindrical segment of a blood vessel 2.00 cm long and 1.50 mm in diameter. What additional outward force would such a ves
> On a part-time job, you are asked to bring a cylindrical iron rod of length 85.8 cm and diameter 2.85 cm from a storage room to a machinist. Will you need a cart? (To answer, calculate the weight of the rod.)
> An angler hangs a 4.50-kg fish from a vertical steel wire 1.50 m long and 5.00 × 10-3 cm2 in cross-sectional area. The upper end of the wire is securely fastened to a support. (a) Calculate the amount the wire is stretched by the hanging fish. The angler
> A demonstration gyroscope wheel is constructed by removing the tire from a bicycle wheel 0.650 m in diameter, wrapping lead wire around the rim, and taping it in place. The shaft projects 0.200 m at each side of the wheel, and a woman holds the ends of t
> When an object is rolling without slipping, the rolling friction force is much less than the friction force when the object is sliding; a silver dollar will roll on its edge much farther than it will slide on its flat side (see Section 5.3). When an obje
> A block with mass m is revolving with linear speed v1 in a circle of radius r1 on a frictionless horizontal surface (see Fig. E10.40). The string is slowly pulled from below until the radius of the circle in which the block is revolving is reduced to r2.
> One end of a post weighing 400 N and with height h rests on a rough horizontal surface with ms = 0.30. The upper end is held by a rope fastened to the surface and making an angle of 36.9° with the post (Fig. P11.90). A horizontal force
> You make two versions of the same object out of the same material having uniform density. For one version, all the dimensions are exactly twice as great as for the other one. If the same torque acts on both versions, giving the smaller version angular ac
> Two ladders, 4.00 m and 3.00 m long, are hinged at point A and tied together by a horizontal rope 0.90 m above the floor (Fig. P11.89). The ladders weigh 480 N and 360 N, respectively, and the center of gravity of each is at its center. Assume that the f
> A siphon (Fig. P12.88) is a convenient device for removing liquids from containers. To establish the flow, the tube must be initially filled with fluid. Let the fluid have density r, and let the atmospheric pressure be patm. Assume that the cross-section
> A uniform 300-N trapdoor in a floor is hinged at one side. Find the net upward force needed to begin to open it and the total force exerted on the door by the hinges (a) if the upward force is applied at the center and (b) if the upward force is applied
> In a materials testing laboratory, a metal wire made from a new alloy is found to break when a tensile force of 90.8 N is applied perpendicular to each end. If the diameter of the wire is 1.84 mm, what is the breaking stress of the alloy?
> A brass wire is to withstand a tensile force of 350 N without breaking. What minimum diameter must the wire have?
> In lab tests on a 9.25-cm cube of a certain material, a force of 1375 N directed at 8.50° to the cube (Fig. E11.37) causes the cube to deform through an angle of 1.24°. What is the shear modulus of the material? Fig. E11.37: F
> A square steel plate is 10.0 cm on a side and 0.500 cm thick. (a) Find the shear strain that results if a force of magnitude 9.0 × 105 N is applied to each of the four sides, parallel to the side. (b) Find the displacement x in centimeters.
> A copper cube measures 6.00 cm on each side. The bottom face is held in place by very strong glue to a flat horizontal surface, while a horizontal force F is applied to the upper face parallel to one of the edges. (a) Show that the glue exerts a force F
> In the Challenger Deep of the Marianas Trench, the depth of seawater is 10.9 km and the pressure is 1.16 × 108 Pa (about 1.15 × 103 atm). (a) If a cubic meter of water is taken from the surface to this depth, what is the change in its volume? (Normal atm
> A specimen of oil having an initial volume of 600 cm3 is subjected to a pressure increase of 3.6 × 106 Pa, and the volume is found to decrease by 0.45 cm3. What is the bulk modulus of the material? The compressibility?
> You freely pivot a horseshoe from a horizontal nail through one of its nail holes. You then hang a long string with a weight at its bottom from the same nail, so that the string hangs vertically in front of the horseshoe without touching it. How do you k
> A solid gold bar is pulled up from the hold of the sunken RMS Titanic. (a) What happens to its volume as it goes from the pressure at the ship to the lower pressure at the ocean’s surface? (b) The pressure difference is proportional to the depth. How man
> The bulk modulus for bone is 15 GPa. (a) If a diver-in-training is put into a pressurized suit, by how much would the pressure have to be raised (in atmospheres) above atmospheric pressure to compress her bones by 0.10% of their original volume? (b) Give
> A vertical, solid steel post 25 cm in diameter and 2.50 m long is required to support a load of 8000 kg. You can ignore the weight of the post. What are (a) the stress in the post; (b) the strain in the post; and (c) the change in the post’s length when
> A uniform rod is 2.00 m long and has mass 1.80 kg. A 2.40-kg clamp is attached to the rod. How far should the center of gravity of the clamp be from the left-hand end of the rod in order for the center of gravity of the composite object to be 1.20 m from
