In Tassel, Illinois (Pop

question 36

Essay

In Tassel, Illinois (pop. 20,000), there are two kinds of families, those who like swimming pools and those who don't. Half of the population is of each type. Families who like swimming pools are willing to spend up to 5% of their income each year on a swimming pool. Families who don't like them would pay nothing for a swimming pool. Nobody wants more than one swimming pool and nobody has thought of sharing a swimming pool. Incomes in Tassel range between $10,000 and $110,000. For incomes M in this range, the number of families in Tassel with income greater than M is about 22,000 - .2M. (The two types of families have the same income distribution.) Find the aggregate demand function for swimming pools in Tassel (demand for swimming pools as a function of the annual cost of having one).

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A condition of total well-being encompassing physical, mental, and social aspects, rather than just the lack of sickness or weakness.

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