Public Econ - Two individuals have identical utility functions

Public Econ - Two individuals have identical utility functions

Question # 00791776 Posted By: dr.tony Updated on: 01/29/2021 09:41 AM Due on: 01/29/2021
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Public Econ

Two individuals have identical utility functions defined on X, a private good (cookies), and F, a public good (fireworks). Define as F = F1 + F2 where Fi the contribution of individual i, and Ui = log(6Xi)+log(F1 +F2) with budget Xi + 3Fi = 120.

(a) Find the socially optimal level of contributions to the public good.
(b) Find the individually optimal level of contributions to the public good.

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  1. dr.tony
    Tutorial # 00791045 Posted By: dr.tony Posted on: 01/29/2021 09:42 AM
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