Martinsville is a rapidly growing town. Many new families have moved to Martinsville
for its job opportunities. Recent development has led to the creation of new apartments,
condos, town houses, and retail spaces. The developments tend to be high in density, and
residents have little or no land of their own for outdoor recreation. Though the town is
clean and offers great public services, such as schools and libraries, there are few public
spaces available for recreation. Land value is high and open space is dwindling. Local
gyms and one country club offer recreation, but not all of the citizens can afford
membership rates or fees. One local park exists, but no pets are allowed. Families who
own dogs complain that there are no resources in the town for families with pets.
As a member of Martinvilles town council, you are considering a proposal for the
construction of a dog park on five acres of public land. A national pet store chain has
offered the town a grant to partially fund the construction of the park. The town has a
budget surplus and can afford the remaining cost of construction. Following the example
of a nearby county, the town council would like to develop the park and charge users a
small yearly fee to finance maintenance. Before this proposal can be accepted, the town
council must hold a hearing to provide citizens with access to information regarding the
proposal. The hearing is in one week and already your office has received phone calls
from concerned citizens who believe that the proposed dog park is a waste of town
resources, as well as calls from pet lovers who would like to see the town devote some
resources for families with pets.
In order to prepare for the meeting, you must organize information so that you can
address the public and answer questions. Although you are personally in favor of the
park, you must consider the publics interest in making a decision.
Fact Sheet
Land value: The town government has assessed the value of one acre of land at 125,000
dollars.
Residents: This town has a population of 100,000 residents.
Residents who have one or more dogs: There are 7,000 licensed dogs in the town, but
there are no statistics for unregistered pets.
Proposed location of the park: The dog park would be constructed on five acres of
undeveloped land owned by the town. The land is partially wooded and would need to be
cleared. It sits behind a townhouse development.
Other factors to consider:
A real estate developer has offered the county 850,000 dollars to purchase the land and
build 40 new luxury townhouses.
The local elementary schools are close to capacity and one needs major renovations.
The Questions:
1. What economic question(s) does this case require the town to ask? (2 points)
2. List the possible resources that the town would need to construct and maintain the park. (2
points)
3. What town resource(s) are scarce? (1 points)
4. Who will be the consumers using this public good? (2 points)
5. What is the opportunity cost of building this park? Explain. (5 points)
6. Identify at least one pro and one con for each of the following options: (5 points)
a. leaving the land undeveloped
b. selling the land to real estate developers to build homes
7. What, if any, market failures might exist in this town? Explain. (3 points)
8. Create a chart that identifies the positive and negative externalities of building the
park. Explain the effect of each externality.
(6 points)
9. How could the town government counteract the negative externalities? (3 points)
10. , write a persuasive argument for or against the
construction of the dog park. Provide a minimum of three supporting details and elaborate on
each to support your position. Your answer should include economic
terms when appropriate and should be written in paragraph form. (16 points)
