Open Word and answer the following questions. Save the document and print it when you are done. 1. Use the equation that follows to solve for  and  in terms of S (safety features). Show your work. 2....

Open Word and answer the following questions. Save the document and print it when you are done.

1. Use the equation that follows to solve for
 and
 in terms of S (safety features). Show your work.

2. Use your reduced-form solution to find the S elasticity of
 at S = 1. Show your work.

3. If the utility function was such that driving intensity were a Giffen good, describe where point C would be located on Figure 1.6.2.4.

4. If the utility function was such that driving intensity were a Giffen good, would this raise or lower traffic fatalities? Explain.