ECN 506 Lecture 9: ECN_CH9
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Suppose a proposed environmental regulation preserving some habitat expects to provide future benefits for the next 10 years as shown in the table below. The current cost today is $3 million and future costs are shown in the table below. Suppose the market interest rate is 10% but some would argue that the appropriate discount rate to be applied to social projects should be 3%. Determine whether the regulation should go ahead on the basis of CBA.
Benefits ($ millions) | Costs ($ millions) | |
Year 1 | 0.25 | 0.08 |
Year 2 | 0.25 | 0.05 |
Year 3 | 0.20 | 0.04 |
Year 4 | 0.5 | 0.02 |
Year 5 | 0.8 | 0.009 |
Year 6 | 0.8 | 0.03 |
Year 7 | 0.7 | 0.03 |
Year 8 | 0.6 | 0.03 |
Year 9 | 0.4 | 0.03 |
Year 10 | 0.2 | 0.04 |
The following frequency distribution reports the number of dollars spent for a group of people during last week.
Dollars | Frequency | Relative Frequency | Midpoint | Cumulative Frequency |
360 up to 420 | 28 | 390 | 28 | 0.29 |
420 up to 480 | 24 | 450 | 52 | 0.25 |
480 up to 540 | 16 | 510 | 68 | 0.16 |
540 up to 600 | 8 | 570 | 76 | 0.08 |
600 up to 660 | 16 | 630 | 92 | 0.16 |
660 up to 720 | 4 | 690 | 96 | 0.04 |
(a) How many people participate in the study?
(b) Calculate the Relative Frequency and enter the results in the above table.
(c) Calculate the Midpoint for each class and enter the results in the above table.
(d) Calculate the Cumulative Frequency and enter the results in the above table.
(e) Construct a Histogram.
(f) Construct a Frequency Polygon.
(g) Construct a Cumulative Frequency Polygon.