Consider an economy with a private good and public good. The economy consists of two consumers whose utility functions are: u₁(x, y) = — ln x¸ + —⁄lny and u₂(x,y) = ln x₂ + ln y 1 The endowment of consumer 1 is w₁ = 2, and endowment of consumer 2 is w₂ = 3, both in units of private goods. The production of public good uses the linear Technology y = z. Lindahl equilibrium sets different price p, of public good for each consumer. Suppose price for private good is 1 to solve. Find x and y for consumer 1, and

Consider an economy with a private good and public good. The economy consists of two consumers whose utility functions are: u₁(x, y) = — ln x¸ + —⁄lny and u₂(x,y) = ln x₂ + ln y 1 The endowment of consumer 1 is w₁ = 2, and endowment of consumer 2 is w₂ = 3, both in units of private goods. The production of public good uses the linear Technology y = z. Lindahl equilibrium sets different price p, of public good for each consumer. Suppose price for private good is 1 to solve. Find x and y for consumer 1, and

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter19: Externalities And Public Goods

Section: Chapter Questions

Problem 19.8P

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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.
Consider an economy with a private good and public good. The economyconsists 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.The endowment of consumer 1 is w1 = 2, and endowment of consumer 2 is w2 = 3, both in units of private goods. The production of public good uses the linear technology y = z. 1. Find Lindahl equilibrium.
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