18. Small country has 3 citizens with the utility function U; = (4X; + G)1/4, 1 citizen with the utility function U₁ = (X₁ + 2lnG)¹² and 2 citizens with the utility function U₁ = X₁ + 3G + 7, where X, is the amount of private good consumed by person i, and G is the amount of public good. If the public good costs 8 PLN per unit, and the private good costs 1 PLN per unit, the efficient amount of public good is: a) 5 5) 8 =) 5/8 8/5

18. Small country has 3 citizens with the utility function U; = (4X; + G)1/4, 1 citizen with the utility function U₁ = (X₁ + 2lnG)¹² and 2 citizens with the utility function U₁ = X₁ + 3G + 7, where X, is the amount of private good consumed by person i, and G is the amount of public good. If the public good costs 8 PLN per unit, and the private good costs 1 PLN per unit, the efficient amount of public good is: a) 5 5) 8 =) 5/8 8/5

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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2. In this question we will combine a very simplified model of an externality that has long-lasting impacts with the model of discounted utility that we learned in our game theory topic. Consider a hypothetical environmental externality: produced as the byproduct of industrial activity, each unit of emission of a pollutant that is emitted once, today, causes $10 of external harm to society each and every year, starting immediately, forever. Let's say that policymakers apply a discount factor of 8 € (0, 1) to future gains and losses, in an analog of the discounted utility model except for cash payoffs rather than utilities. What would the socially efficient Pigouvian tax on the emission of this pollutant be if we applied a discount factor of (i) 8 = 0.5, (ii) 6 = 0.9, and (iii) 8 = 0.99? Give an intuitive explanation of how to interpret the parameter & in this context, and explain precisely but in simple terms what the goal and effect of the Pigouvian tax would be.
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Q5 Homework • Unanswered Given these two individual demand curves, what is the equation for the market demand curve for a private good? i. P=200 - 10Q ii. P=200 - (20/3)Q Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a P= 200 - 4Q P=200 - 8.33Q P = 100 - 8.33Q d. P = 100 - 1.67Q Unanswered A Submit
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