An individual is indifferent among the combinations of public and private goods shown in the following table.

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An individual is indifferent among the combinations of public and private goods shown in the following table.COMBINATION A BCDEF  PUBLIC GOODS 1 2 3 4 5 6 PRIVATE GOODS 16 11 7 4 3 2

Draw the individual's indifference curve. Assuming that the economy can produce one unit of public goods and ten units of private goods, but that it can produce one more unit of public goods by reducing its production of private goods by two units, draw the production possibilities schedule. What is the maximum production of private goods? The maximum production of public goods? Can it produce five units of public goods and one unit of private goods? Which of the feasible combinations maximizes utility?

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Economics Of The Public Sector

ISBN: 9780393925227

4th Edition

Authors: Joseph E. Stiglitz, Jay K. Rosengard

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