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(Solution document) Suppose that The Salt River Project (SRP) has a acquired a large amount of land on the outskirts of the Phoenix Metropolitan Area and is deciding


Suppose that The Salt River Project (SRP) has a acquired a large amount of land on the outskirts of the Phoenix Metropolitan Area and is deciding between i) constructing a large-scale solar farm or ii) creating a nature preserve. The solar farm would generate 500 megawatts of electricity but would take 2 years to construct and generate considerable traffic, noise, and air pollution for nearby residents during that time. The nature preserve would plant a variety of native vegetation to provide provide new habitat for local wildlife. Currently, the land is vacant but lacks any vegetation. If SRP decides to build the solar farm (instead of the preserve) what is included in the opportunity cost? Explain

 







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