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Wrecking my head!!!

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  • 01-05-2008 11:57pm
    #1
    theprizelamb
    Closed Accounts Posts: 37 ✭


    hi all

    reading an environmentle economics text book by Tom Tietenberg, "Environmentle Economics and Policy", its a pretty standard text by all accounts.

    In one of the early chapters he's discussing the allcoation of resouces between periods and measuing the respective consumer surpluses.

    The demand curve is constant for both periods, P=8-0.4Q; MC=2.

    Equlibrium quantity is 15 all things being the same - this is fine.

    he then states that if resources are limited, there are only 20 units for both periods. In period 1, 15 units are used; in period 2, 5 units are used.

    The consumer surplus in period 1 is 45 - again this is fine. But then he states that the consumer surplus in period 2 is 25. (!?)

    In the section he is discounting - but he clearly states in the foot note that the undiscounted net benefit (consumer surplus) is 25.

    I've gone through sheets of paper trying to get this out!

    i'm tired at this stage and thrown the book across the room a few times no - a dig out would be very welcome!


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    #2
    Time Magazine
    Registered Users Posts: 8,452 ✭✭✭Time Magazine


    Honestly, I'm thinking typo.

    Could you write the question and footnote out word for word to make sure that it's the book that's making the typo? Obviously there's a small chance you've mis-read it or something like that.


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