What is the socially optimal number of firefighters? If your answer differs from (a), why? The town of Springfield has two residents: Homer and Bart. The town currently funds its fire departmentsolely from the individual contributions of these residents. Each of the two residents has a utility functionover private goods (X) and total firefighters (M) of the form U = 6 x log(X) + 2 x log(M). The total provisionof firefighters hired, M, is the sum of the number hired by each of the two persons: M = MH + MB. Homerand Bart both have income of $100, and the price of both the private good and a firefighter is 1 dollar.Thus, they are each limited to providing between 0 and 100 firefighters.a. How many firefighters are hired if the government does not intervene? How many are paid for byHomer? By Bart?

Utility function can be defined as the measure for a group of goods and services preferred by…

The town of Springfield has two residents: Homer and Bart. The town currently funds its fire department solely from the individual contributions of these residents. Each of the two residents has a utility function over private goods (X) and total firefighters (M) of the form U = 6 x log(X) + 2 × log(M). The total provision of firefighters hired, M, is the sum of the number hired by each of the two persons: M = MH + MB. Homer and Bart both have income of $100, and the price of both the private good and a firefighter is 1 dollar. Thus, they are each limited to providing between 0 and 100 firefighters. a. How many firefighters are hired if the government does not intervene? How many are paid for by Homer? By Bart?

The town of Springfield has two residents: Homer and Bart. The town currently funds its fire department solely from the individual contributions of these residents. Each of the two residents has a utility function over private goods (X) and total firefighters (M) of the form U = 6 x log(X) + 2 × log(M). The total provision of firefighters hired, M, is the sum of the number hired by each of the two persons: M = MH + MB. Homer and Bart both have income of $100, and the price of both the private good and a firefighter is 1 dollar. Thus, they are each limited to providing between 0 and 100 firefighters. a. How many firefighters are hired if the government does not intervene? How many are paid for by Homer? By Bart?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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