1.There are two types of residents in city A and city B, professors and students. Professors have an income of Y = 200; students have an income of Y = 100. Both cities provide road repair (R) services for their citizens. Professors value road repair more than students because they have nicer cars. In fact, the value of road repair, V to an individual takes the form,

The per-resident cost of road repair is 5R.

a. What is the marginal value of road repair for each type of individual? What is the marginal cost to each type of individual?

b. How much do professors want to spend on road repair? How much do students want to spend?

c. Assume that residents are distributed as follows:

City A City B

Professors75 25

Students 25 75

If each town uses majority voting to determine how much road repair to provide, how much will each town provide? Are some residents unsatisfied with the amount of road repair?