The 130 campers at Bear Creek Campground love their own campfires but hate the smoke from their neighbors' campfires. Each camper's utility function is U = 25f - f2 - s, where f is the number of hours her own campfire burns per day and where s is the amount of smoke in the air. It happens that s is 11 times the average amount of hours that campers use their fires. The campground authority could make all campers better off by limiting the number of hours of campfire per day for everyone. How many hours of campfire per day should the authority allow each camper in order to make the typical camper as well off as possible?
A) 5
B) 7
C) 12.50
D) 8
E) Campers will be best off if they are free to choose their own amounts of campfire.
Correct Answer:
Verified
Q1: If there are negative externalities in production
Q4: The only known way to eliminate externalities
Q6: The efficient amount of air pollution is
Q8: A mountain village owns a common pasture
Q13: A trade between two people is an
Q14: Two stores are located side by side.
Q15: Two stores are located side by side.
Q16: Firm 1 produces output x with a
Q17: If preferences are quasilinear, then the delineation
Q17: The 130 campers at Bear Creek Campground
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents