i need solution of this question topic revelent cost.. please urgently i need help i also attach question 1 .for reference [Lecture on indirect utility function]1. (a) What is the indirect function? What does it show? (b) A consumer has an indirect utilityfunction u = 40y p.p.4. His income is y=$7500; the price of good 2 changes from p2 = $4to p2 = $3, while p: = $1. Is the consumer better off as a result of this price change, worse off, orequally well off as before? Explain the reason for your answer.(c) The maximum amount that the consumer would have been willing to pay for this pricereduction is given by the compensating variation measure. Write down the algebraic equationwhich defines the compensating variation in this case (you don't need to sole the equation).(d) The minimum amount of compensation that the consumer would have wanted to foregothe price decrease is given by the equivalent variation – this is the WTA value of the pricereduction. Write down the algebraic equation which defines the WTA value in this case (youdon't need to solve the equation).(e) If you solved the equations in (c) and (d) – you are not asked to solve them – do you expectthat the WTA value would turn out to be the same as the WTP value in part (d), larger, orsmaller? Explain your reason Topic: Travel CostQuestion: Golden Shore is a popular beach in Chicago located on Lake Michigan downstream of AllLeather's factory, the demand function to go to thebeach at Golden Shore is given by x = 40 – 2p, where x is trips per household per month, and p is the cost of a round-trip visit to Golden Shores. The peoplewho visit Golden Shores come from Hyde Park, South Shore and South Chicago. The round-trip cost to Golden Shore from Hyde Park is $5, from SouthShore it is $10, and from South Chicago it is $14. 5,000 households live in Hyde Park, 3,000 live in South Shore, and 8,000 live in South Chicago.a) How much consumer's surplus is obtained per month through beach recreation at Golden Shore?b) Suppose the correct Pigouvian tax is imposed on leather production by All-Leather and the situation switches.water quality improves at Golden Shores, and the demand function to go to the beach there is now given by x = 44 – 2p. What is the gain in consumer'ssurplus as a result of the reduction in pollution?c) Was the recreational benefit factored into the analysis you conducted in question 1? If it had been factored into that analysis?

Consumer surplus is the cost they actually pay against the cost they are willing to pay. Usually,…

Topic: Travel Cost Question: Golden Shore is a popular beach in Chicago located on Lake Michigan downstream of AllLeather's factory, the demand function to go to the beach at Golden Shore is given by x= 40 - 2p, where x is trips per household per month, and p is the cost of a round-trip visit to Golden Shores. The people who visit Golden Shores come from Hyde Park, South Shore and South Chicago. The round-trip cost to Golden Shore from Hyde Park is $5, from South Shore it is $10, and from South Chicago it is $14. 5,000 households live in Hyde Park, 3,000 live in South Shore, and 8,000 live in South Chicago. a) How much consumer's surplus is obtained per month through beach recreation at Golden Shore? b) Suppose the correct Pigouvian tax is imposed on leather production by All-Leather and the situation switches. water quality improves at Golden Shores, and the demand function to go to the beach there is now given by x=44-2p. What is the gain in consumer's surplus as a result of the reduction in pollution? c) Was the recreational benefit factored into the analysis you conducted in question 1? If it had been factored into that analysis?

Topic: Travel Cost Question: Golden Shore is a popular beach in Chicago located on Lake Michigan downstream of AllLeather's factory, the demand function to go to the beach at Golden Shore is given by x= 40 - 2p, where x is trips per household per month, and p is the cost of a round-trip visit to Golden Shores. The people who visit Golden Shores come from Hyde Park, South Shore and South Chicago. The round-trip cost to Golden Shore from Hyde Park is $5, from South Shore it is $10, and from South Chicago it is $14. 5,000 households live in Hyde Park, 3,000 live in South Shore, and 8,000 live in South Chicago. a) How much consumer's surplus is obtained per month through beach recreation at Golden Shore? b) Suppose the correct Pigouvian tax is imposed on leather production by All-Leather and the situation switches. water quality improves at Golden Shores, and the demand function to go to the beach there is now given by x=44-2p. What is the gain in consumer's surplus as a result of the reduction in pollution? c) Was the recreational benefit factored into the analysis you conducted in question 1? If it had been factored into that analysis?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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