Question
Please provide detailed steps in solving this problem. Thank you! At a village with population = 1001, The only activity is to drive your car
Please provide detailed steps in solving this problem. Thank you!
At a village with population = 1001, The only activity is to drive your car around town. Everyone in town is identical. While everyone likes to drive, everyone complains about the congestion caused by traffic. If a resident has utility function:U(m,d,h) =m+ 7d^2 - d^2 - 4h, where d is the number of hours per day that he spends driving around, h is the average number of hours per day spent driving around by other people in his home town, and m is the amount of money he has left to spend on other stuff besides gasoline and auto repairs. Gas and auto repairs cost $1 per hour of driving. D1 = 5 and D2 = 2. If each citizen believes that their own driving will not affect the amount of driving done by others, they will all drive D1 hours per day. If all citizens drive to maximize the utility of a typical citizen, they will all drive D2 hours per day, where (please solve for the D1 and D2 values indicated in previous 2 scenarios and select the correct answer from the options below)
A. D1 = 3 and D2 = 0
B. D1 = 6 and D2 = 0
C. D1 = 3 and D2 = 3
D. D1 = 5 and D2 = 2
E. D1 = 3 and D2 = 1
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