Let's assume you live 80 miles from the beach and it takes you two hours to drive there from home. Your cost per mile of driving is $0.25 per mile and your opportunity cost of time is $10 per hour. There is no entrance fee to access the beach. The government invests in a beach nourishment project which doubles the width of the beach. Before the beach nourishment policy, your demand for trips was: D: Q = 100-P After the beach nourishment policy, your demand for trips is: D: Q=120-P Using the travel cost method, what would you be willing to pay for the beach nourishment policy? Answer:

Let's assume you live 80 miles from the beach and it takes you two hours to drive there from home. Your cost per mile of driving is $0.25 per mile and your opportunity cost of time is $10 per hour. There is no entrance fee to access the beach. The government invests in a beach nourishment project which doubles the width of the beach. Before the beach nourishment policy, your demand for trips was: D: Q = 100-P After the beach nourishment policy, your demand for trips is: D: Q=120-P Using the travel cost method, what would you be willing to pay for the beach nourishment policy? Answer:

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter21: Demand: Consumer Choic

Section: Chapter Questions

Problem 7E

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