Consider a lake found in the town of Center Barnstead, and then answer the questions that follow. The town has a hiking lodge whose visitors use the lake for recreation. The town also has a fish cannery that dumps industrial waste into the lake. This pollutes the lake and makes it a less desirable vacation destination. That is, the fish cannery's waste decreases the hiking lodge's economic profit.

Suppose that the chemical plant could use a different production method that involves recycling water. This would reduce the pollution in the lake to levels safe for recreation, and the hiking lodge would no longer be affected. If the chemical plant uses the recycling method, then the chemical plant's economic profit is $1,400 per week, and the hiking lodge's economic profit is $2,700 per week. If the chemical plant does not use the recycling
method, then the chemical plant's economic profit is $2,200 per week, and the hiking lodge's economic profit is $1,500 per week. These figures are summarized in the following table.

Complete the following table by computing the total profit (the chemical plant's economic profit and the hiking lodge's economic profit combined) with and without recycling.

Action Chemical Plant Hiking Lodge Total
No recycling $2200 $1500
Recycling $1400 $2700

Total economic profit is highest when the recycling production method is:

a. Total profit without recycling is $3,700, while Total profit with recycling is $41,000.

b. Total economic profit is highest when the recycling production method is: implemented or utilized.

Explanation:

a. Complete the following table by computing the total profit (the chemical plant's economic profit and the hiking lodge's economic profit combined) with and without recycling.

These can be computed by adding the profit under the two scenario as follows:

Total profit without recycling = Chemical plant's economic profit without recycling + Hiking lodge's economic profit without recycling = $2,200 + $1,500 = $3,700

Total profit with recycling = Chemical plant's economic profit with recycling + Hiking lodge's economic profit with recycling = $1,400 + $2,700 = $4,100

The table can therefore be reproduced as follows:

Action               Chemical Plant          Hiking Lodge        Total

No recycling            $2,200                       $1,500             $3,700

Recycling                 $1,400                        $2,700            $4,100

b. Total economic profit is highest when the recycling production method is:

From part a. above, total economic profit is highest when the recycling production method is: implemented or utilized.

The reason is that total profit with recycling of $4,100 is greater than total profit without recycling of $3,700.

whats the

answer; post closing trial balance;