18. Small country has 3 citizens with the utility function U; = (4X; + G)1/4, 1 citizen with the utility function U₁ = (X₁ + 2lnG)¹² and 2 citizens with the utility function U₁ = X₁ + 3G + 7, where X, is the amount of private good consumed by person i, and G is the amount of public good. If the public good costs 8 PLN per unit, and the private good costs 1 PLN per unit, the efficient amount of public good is: a) 5 5) 8 =) 5/8 8/5

18. Small country has 3 citizens with the utility function U; = (4X; + G)1/4, 1 citizen with the utility function U₁ = (X₁ + 2lnG)¹² and 2 citizens with the utility function U₁ = X₁ + 3G + 7, where X, is the amount of private good consumed by person i, and G is the amount of public good. If the public good costs 8 PLN per unit, and the private good costs 1 PLN per unit, the efficient amount of public good is: a) 5 5) 8 =) 5/8 8/5

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter19: Externalities And Public Goods

Section: Chapter Questions

Problem 19.7P

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