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Suppose you conduct a contingent valuation survey of 500 people. You find that 75 people are willing to pay (WTP) $40 for an environmental
Suppose you conduct a contingent valuation survey of 500 people. You find that 75 people are willing to pay (WTP) $40 for an environmental project; 100 people are WTP $30; 150 people are WTP $20; and a 175 are WTP $10. (15 pts) a) If the project actually costs $15 per person, and everyone has to pay for the project if it is implemented (say, through taxes of $15 per person) what would be the total consumer surplus associated with this project? (10 pts) b) If there are 5,000,000 people in NC, and your survey was of a random sample of 500 of them, what do you estimate to be the total consumer surplus for this project for the State of North Carolina? (5 pts)
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