Question

In: Economics

1a)Suppose a regulation causes prices to rise. In order to understand the costs of the regulation...

1a)Suppose a regulation causes prices to rise. In order to understand the costs of the regulation it is necessary to know:

The size of the price effect

The conditions of demand

Both the price effect and the conditions of demand

How many jobs were created

b)A survey technique based on the idea that willingness to pay can be determined by asking people directly is known as:

Travel-cost approach

Direct Price Analysis

Proxy Valuation

Contingent Valuation

c)One way of valuing natural resources like open space is to analyze the effect of open space on housing prices. This type of analysis is possible because:

Houses near open space will have higher travel cost

The value of the open space will be "capitalized" into the value of the house

Housing prices are not subject to indirect price effects

Housing markets are highly regulated

Expert Solution

Q

a)Suppose a regulation causes prices to rise. In order to understand the costs of the regulation it is necessary to know:

Both the price effect and the conditions of demand

b)A survey technique based on the idea that willingness to pay can be determined by asking people directly is known as: Contingent Valuation Approach

Contingent Valuation is a method of estimating the value that a person places on a good. The approach asks people to directly report their willingness to pay to give up a good, rather than inferring them from observed behaviours in regular market places.

Though this does not reveal the most accurate results,depending on the sample size & might not push people to understand the true value,as they talk about their willingness to pay.

c)One way of valuing natural resources like open space is to analyze the effect of open space on housing prices. This type of analysis is possible because:

The value of the open space will be "capitalized" into the value of the house

Rahul Sunny answered 1 year ago

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