Q1. Let X be a public good and Y be a private good. Two individuals, A and B, derive utility from the consumption of X and Y according to the following quasi-linear preferences: U (X,Y)=DaX+Y and U" (X,Y)= BX2 +Y, where a + Band both a and B are greater than one. If the marginal rate of transformation between X and Y is C, find X.

Q1. Let X be a public good and Y be a private good. Two individuals, A and B, derive utility from the consumption of X and Y according to the following quasi-linear preferences: U (X,Y)=DaX+Y and U" (X,Y)= BX2 +Y, where a + Band both a and B are greater than one. If the marginal rate of transformation between X and Y is C, find X.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter19: Externalities And Public Goods

Section: Chapter Questions

Problem 19.10P

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