You have just started your first consulting job as an environmental economist and your boss has assigned the following job to you. 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 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 controlled 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# of Hiking Trips

Hiking AreasPer Person Per Year

$208

$406

$802

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:

• the consumer surplus for a single visit to the new park by a visitor with travel costs of $20
• the total consumer surplus for an average visitor.
• the total expected consumer surplus per year from the proposed park.