Joe is a smoker. He has a utility function for cigarettes smoked indoors (q) and a composite good (q2) given by U(q1.92) = 5q10.4 + q2. Joe's income is $1,000 and faces prices p1 = 3 and p2 = 1. The government is planning to ban indoor smoking. How much money would we have to give Joe to compensate him for this ban? !!

Joe is a smoker. He has a utility function for cigarettes smoked indoors (q) and a composite good (q2) given by U(q1.92) = 5q10.4 + q2. Joe's income is $1,000 and faces prices p1 = 3 and p2 = 1. The government is planning to ban indoor smoking. How much money would we have to give Joe to compensate him for this ban? !!

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter21: Demand: Consumer Choic

Section: Chapter Questions

Problem 16E

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