Suppose public authorities were contemplating locating a hazardous waste incinerator in a particular community. If the members of this community offered to pay $25,000 to keep it out of their area, this amount is equal to their ________ for clean air.
A) willingness to accept
B) willingness to pay
C) use value
D) consumer surplus

Question

Quizplus · Accepted Answer

The $25,000 payment that the community members are offering indicates their willingness to pay to keep the hazardous waste incinerator out of their area. This reflects the value they place on clean air and their desire to preserve it, which is captured through their willingness to pay. Option A (willingness to accept) would apply if the authorities were offering compensation to the community members for accepting the incinerator in their area. Option C (use value) and Option D (consumer surplus) are not applicable in this scenario.

Suppose Public Authorities Were Contemplating Locating a Hazardous Waste Incinerator