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Using the data in Problem 1, suppose at air quality level 5, Felix chooses to buy four bars of soap when they are priced at $1 per bar. Now air quality rises to 10. How much money would we need to take from Felix to keep his utility constant? (Hint: ignore expenditures on all goods except soap.) 2. be 150 CHAPTER 7 DEMAND FOR ENVIRONMENTAL GOODS at five bars, she asked Felix to picture his utility with air quality at three different levels: 2, 4, and 5. Call these initial situations 1, 2, and 3, yielding utility U, U, and 22 e to oapocsd o U. At each of these levels of air quality, she tried varying the amount of soap, asking how air quality should change to keep utility constant. During this mental experi- ment, she asked Felix to imagine his consumption of all other goods was fixed. She obtained the following data, showing values of A to keep utility constant at the three initial levels (U,U,,U) 32 odi dht wliomo dsleor 03 w ANEL I CUnon Cg 9uley Air quality (A) at 1Is dT boog lnsonivo b b sohmassm 012 bolasyo oo abolhso owt o no 16! borpd on rcg bu borcd ai has 93 oo?Lmeu S Us bbod:o bdt ordz 10 1 20 25 gtbobat qo cherm ier 2 5 10 12.5 3 3 1/3 6 2/3 8 1/3 Wa c 5 2 2.5 6 1/4 isube ood boog fainoosb etoog lmie 2oibuns nH batoral 63 vbale ono 4 5 4 5 Sub 4.17 6 1 2/3 3 1/3 Doc SE6 7 1.43 2.86 3.57 20 8 1.25 2 1/2 3 1/8 10S 9 1.11 2.22 2.78 boog sw 110 n2.5 A ter 9 o ni t 3 1 2 Plot the three indifferences curves for soap and air quality implied by these data. boog air quality level 5. Felix

Using the data in Problem 1, suppose at air quality level 5, Felix chooses to buy four bars of soap when they are priced at $1 per bar. Now air quality rises to 10. How much money would we need to take from Felix to keep his utility constant? (Hint: ignore expenditures on all goods except soap.) 2. be 150 CHAPTER 7 DEMAND FOR ENVIRONMENTAL GOODS at five bars, she asked Felix to picture his utility with air quality at three different levels: 2, 4, and 5. Call these initial situations 1, 2, and 3, yielding utility U, U, and 22 e to oapocsd o U. At each of these levels of air quality, she tried varying the amount of soap, asking how air quality should change to keep utility constant. During this mental experi- ment, she asked Felix to imagine his consumption of all other goods was fixed. She obtained the following data, showing values of A to keep utility constant at the three initial levels (U,U,,U) 32 odi dht wliomo dsleor 03 w ANEL I CUnon Cg 9uley Air quality (A) at 1Is dT boog lnsonivo b b sohmassm 012 bolasyo oo abolhso owt o no 16! borpd on rcg bu borcd ai has 93 oo?Lmeu S Us bbod:o bdt ordz 10 1 20 25 gtbobat qo cherm ier 2 5 10 12.5 3 3 1/3 6 2/3 8 1/3 Wa c 5 2 2.5 6 1/4 isube ood boog fainoosb etoog lmie 2oibuns nH batoral 63 vbale ono 4 5 4 5 Sub 4.17 6 1 2/3 3 1/3 Doc SE6 7 1.43 2.86 3.57 20 8 1.25 2 1/2 3 1/8 10S 9 1.11 2.22 2.78 boog sw 110 n2.5 A ter 9 o ni t 3 1 2 Plot the three indifferences curves for soap and air quality implied by these data. boog air quality level 5. Felix

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Using the data in Problem 1, suppose at air quality level 5, Felix chooses to buy four bars of soap when they are priced at $1 per bar. Now air quality rises to 10. How much money would we need to take from Felix to keep his utility constant? (Hint: ignore expenditures on all goods except soap.) 2. be
Transcribed Image Text:Using the data in Problem 1, suppose at air quality level 5, Felix chooses to buy four bars of soap when they are priced at $1 per bar. Now air quality rises to 10. How much money would we need to take from Felix to keep his utility constant? (Hint: ignore expenditures on all goods except soap.) 2. be
150 CHAPTER 7 DEMAND FOR ENVIRONMENTAL GOODS at five bars, she asked Felix to picture his utility with air quality at three different levels: 2, 4, and 5. Call these initial situations 1, 2, and 3, yielding utility U, U, and 22 e to oapocsd o U. At each of these levels of air quality, she tried varying the amount of soap, asking how air quality should change to keep utility constant. During this mental experi- ment, she asked Felix to imagine his consumption of all other goods was fixed. She obtained the following data, showing values of A to keep utility constant at the three initial levels (U,U,,U) 32 odi dht wliomo dsleor 03 w ANEL I CUnon Cg 9uley Air quality (A) at 1Is dT boog lnsonivo b b sohmassm 012 bolasyo oo abolhso owt o no 16! borpd on rcg bu borcd ai has 93 oo?Lmeu S Us bbod:o bdt ordz 10 1 20 25 gtbobat qo cherm ier 2 5 10 12.5 3 3 1/3 6 2/3 8 1/3 Wa c 5 2 2.5 6 1/4 isube ood boog fainoosb etoog lmie 2oibuns nH batoral 63 vbale ono 4 5 4 5 Sub 4.17 6 1 2/3 3 1/3 Doc SE6 7 1.43 2.86 3.57 20 8 1.25 2 1/2 3 1/8 10S 9 1.11 2.22 2.78 boog sw 110 n2.5 A ter 9 o ni t 3 1 2 Plot the three indifferences curves for soap and air quality implied by these data. boog air quality level 5. Felix
Transcribed Image Text:150 CHAPTER 7 DEMAND FOR ENVIRONMENTAL GOODS at five bars, she asked Felix to picture his utility with air quality at three different levels: 2, 4, and 5. Call these initial situations 1, 2, and 3, yielding utility U, U, and 22 e to oapocsd o U. At each of these levels of air quality, she tried varying the amount of soap, asking how air quality should change to keep utility constant. During this mental experi- ment, she asked Felix to imagine his consumption of all other goods was fixed. She obtained the following data, showing values of A to keep utility constant at the three initial levels (U,U,,U) 32 odi dht wliomo dsleor 03 w ANEL I CUnon Cg 9uley Air quality (A) at 1Is dT boog lnsonivo b b sohmassm 012 bolasyo oo abolhso owt o no 16! borpd on rcg bu borcd ai has 93 oo?Lmeu S Us bbod:o bdt ordz 10 1 20 25 gtbobat qo cherm ier 2 5 10 12.5 3 3 1/3 6 2/3 8 1/3 Wa c 5 2 2.5 6 1/4 isube ood boog fainoosb etoog lmie 2oibuns nH batoral 63 vbale ono 4 5 4 5 Sub 4.17 6 1 2/3 3 1/3 Doc SE6 7 1.43 2.86 3.57 20 8 1.25 2 1/2 3 1/8 10S 9 1.11 2.22 2.78 boog sw 110 n2.5 A ter 9 o ni t 3 1 2 Plot the three indifferences curves for soap and air quality implied by these data. boog air quality level 5. Felix
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