Anatole 1s an addıcted recreationist who loves to fish in Lake Elsınore. During the fall quarter I've been keeping track of when he goes fishıng there, how much time and money he spends on each trip to the lake, different measures of site water quality, etc., and I have managed to estimate a demand curve for his trips to Lake Elsinore. I found that Anatole is so addicted to fishing that there are only two things that affect his behavior: the opportunity cost of a trip and the water quality (because fishing yield is better when the water is cleaner There are no limitations to fish yield. My statistical analysis shows that Anatole's monthly demand for trips to the lake when the water is “clean" is given by q = 11- p ; and his monthly demand for 10 1 trips when the water is “dirty" is given by q = 8- -p ; where p is his opportunity cost of a trip and q is the number of trips. 10 Suppose Anatole's opportunity cost of a trip (p) is $40. Answer the following questions: What is the monthly net benefit Anatole derives from fishing at Lake Elsinore when the water is dirty? O a. 160 O b.320 OC. 640 Od 80
Anatole 1s an addıcted recreationist who loves to fish in Lake Elsınore. During the fall quarter I've been keeping track of when he goes fishıng there, how much time and money he spends on each trip to the lake, different measures of site water quality, etc., and I have managed to estimate a demand curve for his trips to Lake Elsinore. I found that Anatole is so addicted to fishing that there are only two things that affect his behavior: the opportunity cost of a trip and the water quality (because fishing yield is better when the water is cleaner There are no limitations to fish yield. My statistical analysis shows that Anatole's monthly demand for trips to the lake when the water is “clean" is given by q = 11- p ; and his monthly demand for 10 1 trips when the water is “dirty" is given by q = 8- -p ; where p is his opportunity cost of a trip and q is the number of trips. 10 Suppose Anatole's opportunity cost of a trip (p) is $40. Answer the following questions: What is the monthly net benefit Anatole derives from fishing at Lake Elsinore when the water is dirty? O a. 160 O b.320 OC. 640 Od 80
Chapter10: Consumer Choice Theory
Section: Chapter Questions
Problem 14P
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STEP 1 (INTRODUCTION)
The term “opportunity cost” refers to the value of the next best alternative foregone. While the demand for a commodity is defined as the quantity that a consumer desires to buy and is willing to pay for that much amount of quantity.
STEP 2 (EXPLANATION)
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