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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.
You recently interviewed an African American candidate but did not hire her. When she found out she did not get the job, she called the office.
Based on the information in this excerpt, when is it permissible to give money that might be considered a bribe or a tip to a government official in order to facilitate business?
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