People derive utility in their lives from consuming goods, g, and clean air, a (measured as the number of particulates removed per m3).
People derive utility in their lives from consuming goods, g, and clean air, a (measured as the number of particulates removed per m3). Suppose a representative consumer’s utility function over these two goods is U (g, a( = g.6a.4 Suppose the price of consumer goods equals $20 and the price of clean air (aka the abatement cost) is calculated to be $60. Income equals $1,500. […]