Susan and Jane are believed to have the same money income, have the same tastes, and face the same set of prices of all goods and services except that of access to the Botanic Garden. Susan lives further away from the garden than Jane and hence incurs a higher travel cost per visit. There is a $5 admission charge for each visit to the Gar The following data summarize their annual visits to the Garden: Individual Travel Cost per Visit Susan 25 Jane 15 No. of Visit per annum 10 50 Assume the inverse demand curve is linear, that is Cost = a + b x visit; and there is no other cost in operating and maintaining the Garden.
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- Suppose that Katie and Kelly each expect to receive $500 worth of marginal benefits from a proposed new recreation center, whereas Kerry expects to receive only $100 worth. If the proposed tax levied on each for the center would be $450, a majority vote will Multiple Choice pass this project. defeat this project and resources will be underallocated to it. defeat this project. pass this project and resources will be efficiently allocated to it.Please no written by hand and no image Suppose we have a monocentric city, but strict laws govern both living space and building heights. Every dwelling contains exactly one person, and each must have exactly 1,500 square feet of space. Every apartment building must contain exactly 10 dwellings per square block of land area. Thus, each will be the same size and height, regardless of distance to the CBD (where distance x is measured in blocks). Income per household is $25,000 per year, which we’ll express in thousands of dollars, i.e., y = 25. The transportation cost parameter is t = 0.01, so the cost of living 20 blocks from the CBD is 0.2 per year (i.e., $200). Consumers all have the same utility function u(c, q). (a) Write down the standard consumer budget constraint from lecture II, including the above parameter values for y, q, and t. (b) Since each person only consumes q and c, and q is fixed at 1,500, what must be true about c for all consumers (regardless of location) if we are…According to the Centers for Disease Control and Prevention, a 40-year-old woman has a 15 in 10,000 chance of dying in the next year. If a group of 670 women who are 40 years old wish to purchase a life insurance policy that will pay $1,000,000 if they die in the next year, how much will an insurance company charge each of these women this year for an actuarially fair policy? Assume that payouts on policies are the insurance company's only costs. Round your answer to the nearest whole dollar. charge per woman: $__
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- Marbella has 101 residents. All wear the same fancy clothes and each has the same utility function, u(m, b, B) = m + 14b − b2 − B/50, where m is the amount of macaroni (in kilograms) that he or she eats per day, b is the number of hours that he or she spends on the beach per day, and B is the total number of person-hours spent per day on the beach by other residents of Marbella. Each has an income of $10 per day and macaroni costs $1 per kilogram. The city council is considering a law that would limit the amount of time that any person can spend on the beach. How many hours per day should they allow in order to maximize the utility of a typical Marbellite? A. 6 B. 9 C. 7 D. 10 E. They could not possibly be made better off by legislation that limits their freedom to choose.Suppose that there are three beachfront parcels of land available for sale in Asilomar and six people who would each like to purchase one parcel. Assume that the parcels are essentially identical and that the minimum selling price of each is $445,000. The following table states each person's willingness and ability to purchase a parcel. Person Willingness and Ability to Purchase (Dollars) Ana 510,000 Charles 470,000 Dina 420,000 Gilberto 390,000 Juanita 380,000 Yakov 600,000 Which of these people will buy one of the three beachfront parcels? Check all that apply. A. Ana B. Charles C. Dina D. Gilberto E. Juanita F. Yakov Assume that the three beachfront parcels are sold to the people that you indicated in the previous section. Suppose that a few days after the last of those beachfront parcels is sold, another essentially identical beachfront parcel becomes available for sale at a minimum price of $432,500. This fourth…A husband and wife would produce incomes Yh and Yw in their fallback situations. The utility each derives in any circumstance is just equal to his or her consumption expenditure in that circumstance. In their fallback situations, their consumption expenditure levels are just equal to their incomes. Thus their fallback levels of utility are Yh and Yw. If they cooperate, they produce Z>Yh + Yw. They engage in Nash cooperative bargaining to determine how to allocate Z across the consumption of the husband, Ch, and consumption of the wife, Cw, subject to the budget constraint that Ch + Cw = Z. Under any bargained allocation, the two would derive utilities of Ch and Cw. a) The surplus associated with cooperation is S = Z − Yh − Yw. Show that each spouse consumes his or her fallback income plus half the surplus in the Nash cooperative bargaining solution. Please do fast ASAP fast please.
- A husband and wife would produce incomes Yh and Yw in their fallback situations. The utility each derives in any circumstance is just equal to his or her consumption expenditure in that circumstance. In their fallback situations, their consumption expenditure levels are just equal to their incomes. Thus their fallback levels of utility are Yh and Yw. If they cooperate, they produce Z>Yh + Yw. They engage in Nash cooperative bargaining to determine how to allocate Z across the consumption of the husband, Ch, and consumption of the wife, Cw, subject to the budget constraint that Ch + Cw = Z. Under any bargained allocation, the two would derive utilities of Ch and Cw. What do Ch and Cw equal if Yh = Yw (but this quantity is not equal to zero)? Please do fast ASAP fastPublic Goods. Suppose a neighborhood in Segovia’s central business area is deciding how many fountains they want to see in the main avenue. There is a first group of 20 neighbors and each has a demand Q = 20 − P for fountains. There is a second group of 5 people, and each has a demand Q = 20 − 2P for fountains. The cost of building each fountain is 225. How many fountains are socially optimal? Fountains are public goods. Hint: To obtain the SMB, please first transform the demand functions into “public goods’ valuations” (“isolate P”) and then multiply them by the amount of neighbors per group. Then you can proceed with the vertical summation.Suppose an emissions standard is implemented that required each plant to reduce its pollution by 5,000 tons. What will be the Total Cost of Pollution Reduction for the entire industry? Suppose instead of an emissions standard, the government implements a tradeable permit system. Each firm is now given 3,000 permit each (1 permit equals 1 ton of pollution allowed). How many permits will be traded between the 2 firms? (Hint: The total amount that need to be reduced is 10,000 tons. i.e. Q1 + Q2 = 10,000)