S Equivalent Utility gains (S)Res. Reservation Price Curve for Gasoline Prices pG Gasoline
$ Equivalent Utility Gains Gasoline ($) Res. Prices pG Reservation Price Curve for Gasoline
S Equivalent Utility gains (S)Res. Reservation Price Curve for Gasoline Prices s value of net utility gains-to-trade pG Gasoline
$ Equivalent Utility Gains Gasoline ($) Res. Prices pG Reservation Price Curve for Gasoline $ value of net utility gains-to-trade
Quasi-Linear Utility Example ◆U(x,y)=V(x)+y e Reservation prices for the first 3 units r1=V(1)-v(0) r2=V(2)-v(1) r3=V(3)v(2) ◆r1+r2+r3=V(3)-v(0)=v(3) ◆ This is the gross benefit(毛收益)of consuming 3 units of good X
Quasi-Linear Utility Example ◆ U(x, y) = v(x) + y ◆ Reservation prices for the first 3 units: r1= v(1) - v(0) r2= v(2) - v(1) r3= v(3) - v(2) ◆ r1+r2+r3=v(3)-v(0)=v(3) ◆ This is the gross benefit （毛收益）of consuming 3 units of good x
Quasi-Linear Utility ()Res Gross benefit =v(3) Values 5 6 23456 Gasoline(gallons)
Quasi-Linear Utility Gross benefit = v(3) 0 2 4 6 8 10 Gasoline (gallons) ($) Res. Values 1 2 3 4 5 6 r1 r2 r3 r4 r5 r6