9. Golden Shore is a popular beach in Chicago located on Lake Michigan downstream of All- Leather's factory. Under the circumstances described in part (0) of the above question, 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 iti $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 to the conditions described in part (g) of the above question. As a result, 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?

9. Golden Shore is a popular beach in Chicago located on Lake Michigan downstream of All- Leather's factory. Under the circumstances described in part (0) of the above question, 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 iti $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 to the conditions described in part (g) of the above question. As a result, 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?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.6P

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