Find socially optimal level of contributions to public good

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Reference no: EM132710360

Question: Two individuals have identical utility functions defined on X, a private good (cookies), and F, a public good (fireworks). Define as F = F1 + F2 where Fi the contribution of individual i, and Ui = log(6Xi)+log(F1 +F2) with budget Xi + 3Fi = 120.

(a) Find the socially optimal level of contributions to the public good.

(b) Find the individually optimal level of contributions to the public good.

Reference no: EM132710360

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