Change the model of public goods in the following fashion. Suppose that Tunits of goods acquired as

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Change the model of public goods in the following fashion. Suppose that Tunits of goods acquired as taxes from the private sector produces T1/2/a units of public goods, where a > 0. Determine the production possibilities frontier (PPF), and illustrate it in a diagram. Show in your diagram what happens to consumption of private and public goods if a increases, and discuss your results.

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Macroeconomics

ISBN: 978-0134472119

6th Edition

Authors: Stephen D. Williamson

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