6.03

06.03 Research Notes


Consider all possible solutions or alternatives. Give three possible solutions to the economic issue you are investigating.
Beach Nourishment
Breakwaters
Beach walls

Why would some people oppose the solutions you have chosen?  

Projects are considered expensive and time consuming  

1)Calculate the consequences of these solutions—both intended and unintended at all levels of the economy.What positive or negative externalities does this issue present at each sector of the economy? Refer to your circular-flow diagram. 

2) What are the externalities, both positive, and negative, that could result from each possible solution

Beach nourishment: 1,2)
Negative:Disrupts natural habitat, may crush animals living under the sand before new artificial sand is put in place, tax increase,
Positive: Creates jobs, keeps natural looking beauty of beach, increases tourism. Increases amount of stocks purchased in the area/property bought, loans created and loaned out, outsourced labor due to artificial sand being produced.

Breakwaters: 1,2)
Positive: Easily repaired protects against fast and large waves, provides jobs,
Negative: Aesthetically displeasing, relatively permanent, bad for animals trying to move from place to place or trying to feed, stocks are not bought in the area, businesses lose customers in that area, bad for the environment, Government charges more taxes

Sea walls 1,2)
Positive: Financial market loans increase, Provides coastal protection, protects against high waves and erosion, provides jobs in the building of it, much lower space requirement
Negative: Can damage the surrounding structures as well as itself overtime (waves shoot up seawall and back down creating a hole in the sediment below, thus caving in the seawall after a long time) lowers stock purchased in area after seawall is destroyed, businesses not as prosperous, Government charges more taxes.


3) What incentives do individuals, businesses, and government have to act on each possible solution?


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Beach nourishment: 3)
More beautiful beach (habitat maintained) this increases tourism to the area. Prevents coastal erosion for sometime/lowers it in the area and risk of storm damages for houses on the coast.

Breakwaters: 3)
Provides a very stable and secure (relatively permanent) solution to the erosion issue.

Seawalls: 3)
Takes up less space vs breakwaters, stronghold against high waves
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