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Read carefully and answer details please. no hand writing as well. I will check and send back if something is wrong. l 6. (10 points)

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Read carefully and answer details please. no hand writing as well. I will check and send back if something is wrong.

image text in transcribed
l 6. (10 points) Package deals are common in vacation travel. Paradise Vacations is selling trips to Hawaii for a weekend holiday. The tourists can buy the ights and hotel separately or they can bu the bundle. Bundle {Flight and Hotel) Allen $450 Barbara $700 Colin $50 $400 $450 The dollar values in the table are the amount each consumer is willing to pay for that particular option. (a) Assume that the Flight and hotel are sold separately. Each consumer has to be charged the same price for a ight and the same price for a hotel. What would the optimal price be if pricing was done in this manner? Please explain. (b) Assume that only a bundle of the Flight + Hotel are available. What is the optimal bundle price of the bundle? Please explain. (c) Assume that the Flight and the Hotel are available separately and as a bundle. What price of the hotel and ight separately, and then as a bundle would lead to maximum revenue for Paradise Vacations {you will have to determine the individual price and the bundle price)? Please give an explanation. T". (10 points) (a) Please explain how if the United States gives Covid-lgI vaccines for free to poor developing countries, that might result in benets for both the United States and for the developing countries. Is this an extemality for the United States? You must give an explanation. (b) Are Covid -19 vaccines in the United States a public good? Assume that there is no shortage of vaccines in the U.S. and the vaccines are paid for either by the government or by health insurance. Please explain. (o) Are Covid-lgI vaccines in India a public good? In India there is a shortage of vaccines, and the public has to pay out-of-pocket for the vaccines. Please explain.|

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