The town of Musicville has two residents: Bach and Mozart. The town currently funds its free outdoor concert series solely from the individual contributions of these residents. Each of the two residents has a utility function over private goods (X) and total concerts (C), of the form U = 3 x log(X) + 2 × log(C). The total number of concerts given, C, is the sum of the number paid for by each of the two persons: C = CB + CM. Bach and Mozart both have income of 80, and the price of both the private good and a concert is 1. Thus, they are limited to providing between O and 50 concerts. a. How many concerts are given if the government does not intervene?

The town of Musicville has two residents: Bach and Mozart. The town currently funds its free outdoor concert series solely from the individual contributions of these residents. Each of the two residents has a utility function over private goods (X) and total concerts (C), of the form U = 3 x log(X) + 2 × log(C). The total number of concerts given, C, is the sum of the number paid for by each of the two persons: C = CB + CM. Bach and Mozart both have income of 80, and the price of both the private good and a concert is 1. Thus, they are limited to providing between O and 50 concerts. a. How many concerts are given if the government does not intervene?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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