Welfare Economics, 2019/2020 1st Semester, Assignment Three
Notes:
(1). Due: Nov. 28, 2019, Thursday; hard copy required, submitted in person or at Mr.
Sun’s mail box in Room 3022 of Building E21
(2). You may work alone or team up with a classmate. That is, work in group
consisting of 3 students or more will NOT be marked
Consider a community composed of 6 individuals each respectively having a
so-called quasi-linear utility function as follows,
,
=6
+
where
is
the quantity supplied of a public good, equaling the sum of the provision of the public
good by each individual
, ∈ {1,2, … ,6}, namely
quantity consumed of a private good by individual ,
=∑
, and
is the
∈ {1,2, … ,6}. Assume that the
prices of the public and the private goods are both equal to 1. Find the Pareto optimal
supply of G.