Question

Consider an economy with three types of individuals, differing only with respect to their preferences for monuments. Individuals of the first type get a fixed benefit of 100 from the mere existence of monuments, whatever their number. Individuals of the second and third type get benefits according to BII = 200 + 30M – 1.5M2 and BIII = 150 +90M – 4.5M2, where Mdenotes the number of monuments in the city. Assume that there are 50 people of each type. Monuments cost $3,600 each to build. How many monuments should be built?


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  • CreatedApril 25, 2015
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