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4. [15 marks] There are three individuals in a community: 1,2 and 3. Their valuations of the public good, G, are MB1 = 40 -
4. [15 marks] There are three individuals in a community: 1,2 and 3. Their valuations of the public good, G, are MB1 = 40 - 2G, MB2 = 20 - G and MB3 = 10 - G/2. Let MCG = ACG = 12. a. [5 marks] Calculate the efficient level of G. b. [5 marks] Suppose the individuals must vote to determine the level of G, assuming that each pays 1/3 of the cost. What will G be, according to the median voter theorem? Is this G efficient? Show your work. c. [5 marks] Suppose the individuals must vote to determine the level of G, assuming that person 3 pays all of the cost. What will G be, according to the median voter theorem? Is this G efficient? Show your work
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