A local college is deciding whether to conduct a campus beautification initiative that would involve various projects, such as planting trees and remodeling buildings, to make the campus more aesthetically pleasing. and Thus, the visual appearance would For the students of the college, the visual appearance of the campus is be classified as a public good. Suppose the college administrators estimate that the beautification initiative will cost $4,420. To decide whether the initiative should be undertaken, administrators conduct a survey of the college's 260 students, asking each of them their willingness to pay for the beautification project. The average willingness to pay, as revealed by the survey, is $13. Because the estimated benefit is than the The benefit of the beautification initiative, as suggested by the survey, is $ cost, the college administrators undertake the beautification initiative. The calculation of the benefit of the beautification initiative relied on the ability of the administrators to capture the true willingness to pay of each student accurately. Which of the following scenarios would cause the survey used by the college administrators to yield misleading data on willingness to pay? Check all that apply. Students believe that if the initiative does not happen, the funds for the initiative will not be spent elsewhere. O Students believe they will eventually be charged their willingness to pay.
A local college is deciding whether to conduct a campus beautification initiative that would involve various projects, such as planting trees and remodeling buildings, to make the campus more aesthetically pleasing. and Thus, the visual appearance would For the students of the college, the visual appearance of the campus is be classified as a public good. Suppose the college administrators estimate that the beautification initiative will cost $4,420. To decide whether the initiative should be undertaken, administrators conduct a survey of the college's 260 students, asking each of them their willingness to pay for the beautification project. The average willingness to pay, as revealed by the survey, is $13. Because the estimated benefit is than the The benefit of the beautification initiative, as suggested by the survey, is $ cost, the college administrators undertake the beautification initiative. The calculation of the benefit of the beautification initiative relied on the ability of the administrators to capture the true willingness to pay of each student accurately. Which of the following scenarios would cause the survey used by the college administrators to yield misleading data on willingness to pay? Check all that apply. Students believe that if the initiative does not happen, the funds for the initiative will not be spent elsewhere. O Students believe they will eventually be charged their willingness to pay.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:A local college is deciding whether to conduct a campus beautification initiative that would involve various projects, such as planting trees and
remodeling buildings, to make the campus more aesthetically pleasing.
and
Thus, the visual appearance would
For the students of the college, the visual appearance of the campus is
be classified as a public good.
Suppose the college administrators estimate that the beautification initiative will cost $4,420. To decide whether the initiative should be undertaken,
administrators conduct a survey of the college's 260 students, asking each of them their willingness to pay for the beautification project. The average
willingness to pay, as revealed by the survey, is $13.
Because the estimated benefit is
than the
The benefit of the beautification initiative, as suggested by the survey, is $
cost, the college administrators
undertake the beautification initiative.
The calculation of the benefit of the beautification initiative relied on the ability of the administrators to capture the true willingness to pay of each
student accurately.
Which of the following scenarios would cause the survey used by the college administrators to yield misleading data on willingness to pay? Check all
that apply.
Students believe that if the initiative does not happen, the funds for the initiative will not be spent elsewhere.
O Students believe they will eventually be charged their willingness to pay.
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