Question
Residents of City A currently commute by train to and from the City B, where many of them work. If this train service is terminated,
Residents of City A currently commute by train to and from the City B, where many of them work. If this train service is terminated, residents who chose to would have to commute either by bus or car. Mr. S looks for the train service to be terminated as he is irritated by the train noise. Mr. R on the other hand hopes the train service continues as it is the cheapest and easiest way for her to get to office. If a new policy considers the termination of this train service to and from City A to City B, then
a. what would be the appropriate compensating variation question for Mr. S?
b. what would be appropriate equivalent variation question for Mr. S?
c. what would be the appropriate compensating variation question for Mr. R?
d. what would be the appropriate equivalent variation question for Mr. R?
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