Barney likes to fish at a lake 120 miles from his house. It takes Barney two...

 

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Barney likes to fish at a lake 120 miles from his house. It takes Barney two hours 30 minutes to ride his motorcycle from his house to the lake, and the roundtrip extra cost of operating his bike on the trip is $25. The lake adjoins a farm whose owner has adopted conservation policies on his land to improve water quality at the lake. Assume before the farmer adopts these practices, Barney's demand for trips (i.e., Q) is: Q = 300 - 5TC where TC is the roundtrip travel cost of the trip. After the farmer adopts the conservation practices, Barney's demand rises to Q = 400-5TC Assume that Barney's opportunity cost of time is $20/hour. a. What is Barney's roundtrip travel cost to the lake? b. How many trips to the lake does Barney demand before the water quality improves? c. How many trips to the lake does Barney demand after the farmer adopts conservation practices and water quality improves? d. What is Barney's willingness to pay for an improvement in water quality at this fishing lake? Barney likes to fish at a lake 120 miles from his house. It takes Barney two hours 30 minutes to ride his motorcycle from his house to the lake, and the roundtrip extra cost of operating his bike on the trip is $25. The lake adjoins a farm whose owner has adopted conservation policies on his land to improve water quality at the lake. Assume before the farmer adopts these practices, Barney's demand for trips (i.e., Q) is: Q = 300 - 5TC where TC is the roundtrip travel cost of the trip. After the farmer adopts the conservation practices, Barney's demand rises to Q = 400-5TC Assume that Barney's opportunity cost of time is $20/hour. a. What is Barney's roundtrip travel cost to the lake? b. How many trips to the lake does Barney demand before the water quality improves? c. How many trips to the lake does Barney demand after the farmer adopts conservation practices and water quality improves? d. What is Barney's willingness to pay for an improvement in water quality at this fishing lake?

Answer rating: 100% (QA)

a To find Barneys roundtrip travel cost TC to the lake we need to consider the given information abo... View the full answer