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3. Suppose that there are a large number, H, of identical households with utility function: U(:ch,h,G) : alnxh+(1a)lnh+ylnG 7 > 0, 0 0. (3) 11:].

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3. Suppose that there are a large number, H, of identical households with utility function: U(:ch,h,G) : alnxh+(1a)lnh+ylnG 7 > 0, 0 0. (3) 11:]. 15:1 Given that if asked to contribute voluntarily to the provision of the public good agents will free-ride, the government proposes to provide the good publicly, nancing its production with an income tax at rate if. a. What is the optimum quantity of public good for the government to provide, given the constraint that they must nance with distorting taxation? b. Does this quantity satisfy the Samuelson condition? That is, is the outcome Pareto efcient

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