Consider an economy with a private good and public good. The economy consists of two consumers whose utility functions are: u₁(x, y) = — ln x¸ + —⁄lny and u₂(x,y) = ln x₂ + ln y 1 The endowment of consumer 1 is w₁ = 2, and endowment of consumer 2 is w₂ = 3, both in units of private goods. The production of public good uses the linear Technology y = z. Lindahl equilibrium sets different price p, of public good for each consumer. Suppose price for private good is 1 to solve. Find x and y for consumer 1, and

Consider an economy with a private good and public good. The economy consists of two consumers whose utility functions are: u₁(x, y) = — ln x¸ + —⁄lny and u₂(x,y) = ln x₂ + ln y 1 The endowment of consumer 1 is w₁ = 2, and endowment of consumer 2 is w₂ = 3, both in units of private goods. The production of public good uses the linear Technology y = z. Lindahl equilibrium sets different price p, of public good for each consumer. Suppose price for private good is 1 to solve. Find x and y for consumer 1, and

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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