A team of 11th and 12th graders entered the international competition in economics this spring. “Les Lions de l’éco” won Best Video. You can watch it and read the whole project here. Congratulations to Natasha Laffoux, Robin Lescroart, Benjamin Serina and Tristan Touratier!

Case Study: Mid-Sized North Indian City Requires Upgraded Fire Department (Source: Economics World Cup)

Background: 

You and your teammates are consultants at a public capital projects consultancy firm. 

For this case, your client is an undisclosed city administration in Northern India.

The city has experienced rapid development over the last decade, leading to increased fire hazards. The aging fire department fleet is insufficient to meet the current needs. 

Fortunately, the city has received a grant from the Central Government specifically for upgrading the fire department. The Central Government’s grant is intended to cover all one-off investment expenses associated with this upgrade.

However, the future operational costs of this fire department must be covered by the city’s budget. The city’s finance department has completed their calculations and determined that the city is able to allocate a budget to maintain this fire department.

Your Task: 

As talented consultants, you must devise a strategic plan to use the allocated funds effectively to upgrade the fire department. 

Your plan should aim to minimize the risk and damage from fires while effectively managing the city’s resources.

You must consider factors including, but not limited to, the:

• Land costs
• Fire department capital expenses
• Operational expenses
• Population density
• Risk factors
• Environmental impact

Key Economic Concepts to Explore:

• Cost-Benefit Analysis: Evaluate the costs and benefits of different options for upgrading the fire department, including infrastructure, vehicles, and technologies.
• Opportunity Cost: Discuss the trade-offs of allocating funds to this project versus other potential uses.
• Supply and Demand: Consider how the demand for emergency services in a growing city impacts the supply of necessary resources and equipment.
• Externalities: Analyze the social and environmental impacts of your recommendations, such as the choice between electric and diesel trucks.
• Budget Constraints: Work within the given budgetary limitations to propose a feasible plan.

Submission:

Your project proposal can be in the form of a 5-minute video, a 10-slide presentation, a 10-minute podcast, or a 1000-word essay. Alongside your proposal, you should also separately share an appendix file which shows your worked out solutions and methodology.