Consider an economy with a private good and public good. The economyconsists of two consumers whose utility functions are1u₁(x₁, y) = 1⁄² ln x₁ + 1⁄lny and u₂(x, y) = ln x₂ + ²/² ln y23The endowment of consumer 1 is w = 2, and endowment of consumer 21is w.2= 3, both in units of private goods. The production of public gooduses the linearTechnology y = z.a. Find the voluntary contributions equilibrium.b. Find Lindahl equilibrium

Given the utility functions for 2 consumers: u1(x1,y)=12lnx1+12lnyu2(x2,y)=13lnx2+23lny The…

Consider an economy with a private good and public good. The economy consists of two consumers whose utility functions are In u₁(x, y) = ln x₁ + 1⁄lny and u₂(x, y) = /²/ ln x₂ + ²/²lny ½⁄/ The endowment of consumer 1 is w = 1 2, and endowment of consumer 2 is w = W₂ 3, both in units of private goods. The production of public good uses the linear Technology y = z. a. Find the voluntary contributions equilibrium. b. Find Lindahl equilibrium

Consider an economy with a private good and public good. The economy consists of two consumers whose utility functions are In u₁(x, y) = ln x₁ + 1⁄lny and u₂(x, y) = /²/ ln x₂ + ²/²lny ½⁄/ The endowment of consumer 1 is w = 1 2, and endowment of consumer 2 is w = W₂ 3, both in units of private goods. The production of public good uses the linear Technology y = z. a. Find the voluntary contributions equilibrium. b. Find Lindahl equilibrium

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider an economy with a private good and public good. The economy consists of two consumers whose utility functions are: u1(x1,y)=1/2 ln x1 + 1/2 ln y and u2(x2,y)=1/3 ln x2 + 2/3 ln y (better written equations attached) The endowment of consumer 1 is w1=2, and the endowment of consumer 2 is w2=3, both in units of private goods. The production of public good uses the linear Technology y=z. Find Lindahl equilibrium.
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