Instructions: 1. Please provide your solution, explanation and drawing for every single question, in the space provided under the question. 2. Please write clearly. If your answers are not readable, then it will have zero points. 3. Graphs: Please label the axes, lines, curves and areas correctly. Graphs with no labels will not receive any points.

Q.1. (20 Points) Suppose x and y with the following demand functions a public good,

G: = 150 1.5 and = 100 0.5 where and are the prices that x and y is willing to pay for G.

a. Plot (i) the demand of x and y for G and (ii) market demand for G.

b. Calculate the Samuelson-Lindahl equilibrium if the marginal cost of producing G is $170.