Problem of maximizing the sum of household utilities

Assignment Help Business Economics

Reference no: EM13885527

Consider three households (i = 1, 2, 3) each with preferences ui(xi , G) = xi × G where xi is the consumption level of private goods by household i and G is the level of public good. Private good costs 1 and public good costs 10. Individuals have income w1 = 30, w2 = 50 and w3 = 20. Determine the level of G that maximizes total welfare. (Hint: solve the problem of maximizing the sum of household utilities subject to the resource constraint.)

Reference no: EM13885527

Questions Cloud

Automobile inventories have been rising : Since August, automobile inventories have been rising. Moreover, recent unemployment numbers suggest that European economies will grow more slowly than expected. What direction are auto prices likely to go?

Classify measurements of quality of care : Classify five measurements of quality of care in a hospital, and justify the major reasons why you believe these measurements matter to patients in their process of choosing a hospital for emergency or inpatient care.

The unintended consequences of raising minimum wage : The unintended consequences of raising minimum wage from $8 to $12 per hour will create more unskilled unemployment in the economy. True or False, explain. The unintended consequences of raising minimum wage from $8 to $12 per hour will create more u..

Consider a public project to build a bridge : Consider a public project to build a bridge. The government is deciding whether to undertake it or not. Let k = 1 if the bridge is built and k = 0 if the bridge is not built. The cost of building the bridge is C = 97. Assume the government knows θ. F..

Problem of maximizing the sum of household utilities : Consider three households (i = 1, 2, 3) each with preferences ui(xi , G) = xi × G where xi is the consumption level of private goods by household i and G is the level of public good. Private good costs 1 and public good costs 10. Individuals have inc..

How changes in medical technology affect health care costs : Research and discuss 1 piece of federal legislation that has affected the use of medical technology. Explain how changes in medical technology affect health care costs

Present the argument you developed in the position paper : They are individual, three to five (3-5) minute presentations in which you have to present the argument you developed in the position paper in regards to institutions and their importance to remembrance.

What is the value of the multiplier : If the final change in output for the economy as a whole is $119.6 billion, unemployment is 6.2% and there had previously been an initial increase in government spending of $46 billion, what is the value of the multiplier?

The loan will be repaid in installments at end of year : A company borrowed $200,000 at an interest rate of 10% compounded annually over five years. The loan will be repaid in installments at the end of each year in the amounts of: What will be the size of the last payment in year 5 that will pay off the l..

User Account

All Pages