The following gives information on visitors to Jellybear Park: A researcher keeps careful track of visitors to
Question:
A researcher keeps careful track of visitors to Jellybear and learns that there is a total of 3750 visits to the park in one year. The only cost of traveling to the park is mileage, at $1/mile. The researcher estimates the relationship between costs and number of visits per capita (per person) to be Visits/Capita = 1 - 0.15 * Cost.
(a) Add columns to this identifying total costs of a visit from each place, visits per capita from each town, and the total number of visits from each town (the visits/capita multiplied by the population).
(b) Why doesn't the researcher observe anyone coming from Delight to Jellybear?
(c) If getting to the park is the only cost associated with a visit (there is no admission price), how many people in total visit Jellybear? Start a with one column showing admission price (in this case, $0) and another total visits.
(d) Because of management costs, park managers are considering charging for admission to Jellybear. They are considering prices ranging from $1/visit to $5/visit.
(e) Put the information on admission price and total visits in the table from (c). This table shows the relationship between admission price and total number of visits. What is it?
(f) Estimate the consumer surplus associated with visiting Jellybear Park when the admission fee is $0. (It will be an approximate value, because the relationship in (e) is not a straight line.)
(g) What method have you used to estimate the value of visits to Jellybear Park? Why?
Step by Step Answer:
The Economics Of The Environment
ISBN: 9780321321664
1st Edition
Authors: Peter Berck, Gloria Helfand