Joe is a smoker. He has a utility function for cigarettes smoked indoors (q1) and a composite good (q2) given by U(q1,q2) = 15q10.6 + q2
. Joe's income is $1,000 and faces prices p1 = 5 and p2 = 1. The government is planning to ban indoor smoking. How much money would we have to give Joe to compensate him for this ban?