a) How are the marginal valuations summed up in the case of a pure public good?...
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a) How are the marginal valuations summed up in the case of a pure public good? Explain. b) What does the terms warm glow and social capital mean? c) Discuss with the help of a picture why there are inefficiencies in the consumption of a public good. d) Per and Sally are independently of each other about to decide how much to invest in a public good F. Each individual i has the utility u = F = Fp + Fs where the subscript P denotes Per's investments in the public good and S denotes Sally's investments. Per's budget restriction is 80 Xp + Fp and Sally's budget restriction is 100 = Xs + Fs. Show Per's and Sally's private investment levels of the private good and the public good. Show how the solution is different from the social optimum. Explain. InX;+F where X is a private good and a) How are the marginal valuations summed up in the case of a pure public good? Explain. b) What does the terms warm glow and social capital mean? c) Discuss with the help of a picture why there are inefficiencies in the consumption of a public good. d) Per and Sally are independently of each other about to decide how much to invest in a public good F. Each individual i has the utility u = F = Fp + Fs where the subscript P denotes Per's investments in the public good and S denotes Sally's investments. Per's budget restriction is 80 Xp + Fp and Sally's budget restriction is 100 = Xs + Fs. Show Per's and Sally's private investment levels of the private good and the public good. Show how the solution is different from the social optimum. Explain. InX;+F where X is a private good and
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aMarginal benefit is the increase in total benefit that results from a oneunit ... View the full answer
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Small Business Management Launching & Growing Entrepreneurial Ventures
ISBN: 978-1133947752
17th edition
Authors: Justin Longenecker, William Petty, Leslie Palich, Frank Hoy
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