environmental economy

environmental economy.

I’m studying and need help with a Economics question to help me learn.

Your task here is to calculate the net annual cost of switching from less efficient incandescent light bulbs to more efficient, compact fluorescent and/or LED light bulbs. The more efficient light bulbs cost more to purchase but use less energy per hour that they are used and also last longer.

Over Thanksgiving break complete the following tasks:

  • Identify the type of light bulbs being used in your house (incandescent, CFL, LED) along with the number of each type of bulb.Ignore any halogen bulbs or other specialty and decorative bulbs.For each bulb current type, note the wattage.(A typical incandescent bulb is either 40W, 60W or 75W.A typical CFL bulb is about 13W or 20W.LED bulbs have the lowest wattage.)
  • Examine your family’s electricity bill and determine the price of electricity being paid.
  • Determine the cost of purchasing a new bulb of each type.You may visit a local hardware store that your family likes to use, or use an online source like Lowes.com or Homedepot.com.Be sure that the bulbs that you consider are exactly equivalent and provide the same amount of light.For example, a 40 W incandescent bulb is equivalent to a 7.5W LED light bulb because both provide 450 lumens of brightness.
  • Next, determine the interest rate that is appropriate for your family.If the bulbs will be charged to a credit card, the interest rate might be somewhere between 12-18%; if the bulbs are paid for with cash or check (ie out of an existing checking or savings account), the interest rate could be as low as 1%; if the bulbs are replaced as part of a larger home remodeling or renovation project, use the interest rate on the mortgage or loan being used to finance the project: this might be around 3-4%.
  • Now you have all the information needed to complete the analysis.Fill out the remainder of the table and determine which type(s) of bulb your family should be using.

Complete part A of the table provided on the next page.

Complete part B of the table provided on the next page.

Complete part C of the table provided on the next page.

Please take this exercise seriously.This is an opportunity for you to give back to your family at the end of this class.They will truly appreciate your input.




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Above Average

Below Average


Above Average

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Above Average

Part A

Hours used annually




# of fixtures

Average watts

Total kWh

Part B

Price of electricity (c/kWh)

Capital cost bulb ($/bulb)

Life of bulb (in hours)




Life of bulb (in YEARS)

Part C

Interest Rate (% per year)


Part D

# of bulbs used per year

Annual K cost per bulb ($)

Annual K cost of all bulbs ($)

Annual lighting bill ($)

Total annual cost ($)

environmental economy

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