Answer the following statement(s) true (T) or false (F)
1. The travel cost method estimates benefits based on the substitutability of a natural resource and its recreational value.
2. A disadvantage of the travel cost method is that it estimates only existence value and not user value.
3. In modeling the travel cost method, the estimated benefit of improving the environmental quality of a natural resource is captured by the change in consumer surplus associated with a decrease in demand for that resource
4. The hedonic price method is based upon the premise that goods and services are valued for their individual attributes.
5. Among the advantages of the hedonic price method is that data on a product’s characteristics are readily available.
1. False
2. False
3. False
4. True
5. False
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Employing the information in Figure 3-2 above, when real disposable income is 1000, savings from households would be ________ and the marginal propensity to save would be ________
A) 300; 0.1 B) 100; 0.2 C) 100; 0.1 D) 500; 0.2
If the quantity of tickets to the fair sold decreases by 10 percent when the price increases by 5 percent, the price elasticity of demand over this range of the demand curve is:
a. price elastic. b. price inelastic. c. perfectly inelastic. d. unitary elastic.
Arguably the most damaging economic consequence of inflation is:
A. high prices. B. the uncertainty it can create. C. the adjustment of sticky wages. D. the erosion of value of real assets.
If the supply of a good is perfectly inelastic, then suppliers will bear the full burden of an excise tax
A. no matter how elastic the demand for the good is. B. only if demand is perfectly elastic. C. only if demand is perfectly inelastic. D. only if the government forbids them to raise the price of the good.