Villagers each have $1,200 to invest in either cattle or a government bond. They will sell either at the end of the year. The bond earns 5% interest and the cattle price depends on the number of animals sold. Using the table below, the individual optimum choosing cattle is and the social optimum is. # Cattle 1 2 3 5 4:3 1:4 03:1 5:2 Total Cattle Average income Income $1,400 $2,750 $4,050 $5,300 $5,850 Marginal Income

Villagers each have $1,200 to invest in either cattle or a government bond. They will sell either at the end of the year. The bond earns 5% interest and the cattle price depends on the number of animals sold. Using the table below, the individual optimum choosing cattle is and the social optimum is. # Cattle 1 2 3 5 4:3 1:4 03:1 5:2 Total Cattle Average income Income $1,400 $2,750 $4,050 $5,300 $5,850 Marginal Income

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter7: Uncertainty

Section: Chapter Questions

Problem 7.8P

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