Asked by
Alexandra LaSerre
on Oct 14, 2024
Verified
The 130 campers at Bear Creek Campground love their own campfires but hate the smoke from their neighbors' campfires.Each camper's utility function is U 17f f 2 s, where f is the number of hours her own campfire burns per day and where s is the amount of smoke in the air.It happens that s is 7 times the average amount of hours that campers use their fires.The campground authority could make all campers better off by limiting the number of hours of campfire per day for everyone.How many hours of campfire per day should the authority allow each camper in order to make the typical camper as well off as possible?
A) 3
B) 6
C) 8.50
D) 5
E) Campers will be best off if they are free to choose their own amounts of campfire.
Campers' Utility
The satisfaction or happiness derived by campers from engaging in camping activities, possibly influenced by factors like location, weather, or equipment.
- Acknowledge the part played by governing entities and regulators in diminishing negative external outcomes to boost welfare.
- Recognize and evaluate the external effects in different market scenarios, such as common resources and public goods.
Verified Answer
AM
Learning Objectives
- Acknowledge the part played by governing entities and regulators in diminishing negative external outcomes to boost welfare.
- Recognize and evaluate the external effects in different market scenarios, such as common resources and public goods.