(a). Suppose the preference relation R₁, of an individual i is complete. Show then that i's choice set, C(Ri, S), is non empty for every set of alternatives S available to person i, if and only if R, is acyclic. (b). Suppose that there is a road from A to B. The demand for trips from A to B depends only on the trips taken, according to the function p=20-0.001x where x is trips per day and p is the time per trip in hours. The more trips made in total, the slower they are because one person's extra journey slows down the others. drivers. The relation of time taken to trips is given by p=2+0.001x. There are no other costs, and the value of time is $1 per hour for all trips. What is the optimal number of trips? i) ii) What money tax should be levied on drivers on a trip in order to ensure optimal utilization?

(a). Suppose the preference relation R₁, of an individual i is complete. Show then that i's choice set, C(Ri, S), is non empty for every set of alternatives S available to person i, if and only if R, is acyclic. (b). Suppose that there is a road from A to B. The demand for trips from A to B depends only on the trips taken, according to the function p=20-0.001x where x is trips per day and p is the time per trip in hours. The more trips made in total, the slower they are because one person's extra journey slows down the others. drivers. The relation of time taken to trips is given by p=2+0.001x. There are no other costs, and the value of time is $1 per hour for all trips. What is the optimal number of trips? i) ii) What money tax should be levied on drivers on a trip in order to ensure optimal utilization?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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