The Forest Service is deciding how to allocate its recreational funding. It can increase fishing opportunities in an area (for instance, by stocking), or it can build more hiking trails. It presents several options in a survey:

In the first round, the survey respondent was asked to rank each option without regard to cost; in the next round, the survey respondent was given the cost information and then asked to rank the options while considering those costs.
(a) In the first round, one respondent ranked alternative C as best, and ranked A as tied with B. Plot the different combinations on a graph, with Fish Stocked on the horizontal axis and Miles of Hiking Trails on the vertical axis. Draw indifference curves that reflect this set of preferences. Do these indifference curves reflect free disposal, slope downward, and not cross, as indifference curves should?
(b) Based on the comparison of alternatives A and B, how does this respondent trade off between fish stocking and hiking trails? In other words, if he were to give up 100 fish stocked, about how many miles of hiking trails would he need to get in compensation? What does this comparison tell you about how this respondent values fish stocking compared to hiking trails?
(c) When the respondent was presented with the cost information, he changed his ranking so that A was best, C was second best, and B was least preferred. Does the fact that A and B are no longer equally preferred mean that the respondent is inconsistent in his preferences? Why or why not?
(d) Compare alternatives A and C. What can you say about how much the respondent is willing to pay for 300 additional fish stocked when there are already 100 stocked?
(e) Now compare alternatives B and C. What can you say about how much the respondent is willing to pay for 6 additional miles of hiking trails when there are already 2 additional miles of trails?

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Option Fish Stocked (Hundreds of Fish) Hiking Trails (Miles) Cost S50 $100 S125