Question

EEM 320: ENVIRONMENTAL ECONOMICS SPRING 2019 PROBLEM SET 3: DUE ON THURSDAY, MARCH 28 Application 80: A Travel-Cost Example Now it is time for your first consulting job as an environmental economist. The Forest Service would like to know whether they should set aside some National Forest land, previously slated to be logged, for hiking You are helping do a travel-cost analysis to estimate the benefits of the set-aside Survey data has been gathered from 500 hikers who visited a forest in a neighboring state. Using a statistical technique called regression analysis, you have controiled for differences in income, employment status, age and other important factors that might affect the number of hiking trips taken. Taking these factors into account, you have developed the following relationship: Cost to get to Hiking Areas # ofifikang Trips Per Person Per Year $20 540 $80 1 Graph the demand curve for hiking trips as a function of the price - the travel cost 2 Based on demographic information about the people living in the vicinity of the proposed park, you have estimated that 50,000 people will take an average of 4 hiking trips per year. For the average person, calculate (0) the oonsumer surplus for a single visit to the new park (Chint you must figure out the averagc travel cos based on the average number of trips (2) the total consumer surplus for an average visitor (hint the area of a triangle is 4(B*H), and (3) the total expected consumer surplus per year from the proposed park

need help with questions 1 and 2

Answer 1

Answer :

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