Q4. (5 points) Sam likes to go trout fishing at Lake Bass. It takes 4 hours to d

Question

Q4. (5 points) Sam likes to go trout fishing at Lake Bass. It takes 4 hours to drive there, which uses 10 gallons of gas. If Sam earns S10 per each hour worked and pays $2.50 for a gallon of gas, he goes bass fishing twice each year and spent 8 hours fishing before returning home. If Sam gets a raise, so that he makes $20 per hour, and the price of gas increases to $3 per gallon, then he would only make one trip. Give two price, quantity combinations on Sam's demand curve for trips to Lake Bass in the table below Price (S perQuantity trip) (trips per year)

Explanation / Answer

1st case

Cost will be:-

(4+8+4 ) * 10 because this is the time being given on the trip and would mean lettng go $10 for each hour. (4 hr to go, 8 hr staying there, 4 hr coming back and $10 is the wage rate)

= 160

Also cost of oil = (10+10 ) * 2.5 = 50 ( both to fro from fishing )

so total cost = 160 + 50= 210. ( 2 trips mean 210* 2= 420)

Case 2

Cost will be:-

(4+8+4) * 20= 320

(10+ 10) * 3 = 60

Total = 320+60 = 380.

Price ( per trip) Qty ( per year) $210 2 trips $380 1 trip

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