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: Suppose that 100 people live around a hazardous waste dump. If the people continue to live there for 20 years, one of them will likely contract a painful, non-fatal cancer that will lead to $1 million in health care costs, foregone wages, and pain and suffering. Assume this is all the damage this waste will ever do (the waste loses its toxicity after 20 years). The Environment Canada has three choices:
a. Do nothing.
b. Clean up at a cost of $4 million
c. Relocate the families at a cost to taxpayers of $1 million; fence off the property for 20 years.
i. Rank the solutions in terms of efficiency. Explain your reasoning.
ii. Rank the solutions in terms of safety. Explain your reasoning.
Assume that a Mazda 2 sells for 16,000 Australian dollars in Australia and 10,000 Canadian dollars in Canada If purchasing-power parity holds, what is the Canadian dollar/Australia
What is the present worth of a cash flow that gives you $6 in every time period from 1 to 20 when the interest rate is zero?
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