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4. Suppose that the cost function for a particular public good is given by C(z ,n) = (8n n2 + .05n3)z In this case, the

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4. Suppose that the cost function for a particular public good is given by C(z ,n) = (8n n2 + .05n3)z In this case, the unit cost of 2 per capita is 8 n + .05n2. a) Compute unit cost per capita for n = 1,2,...,10,ll,12. At what value of n is this cost minimized? Compute c (the total cost per unit of z) for n = 5 and n = 10. As before, this is done simply by multiplying your unit cost per capita values by the relevant 11. Suppose the economy contains 5 high demanders and 5 low demanders. The demand curves for z are given by D1 = 6 z and D2 = 20 z for the low and high demanders, respectively. Suppose the economy is organized into two homogeneous communities each with population 5, one for the low demanders and one for the high demanders. b) Using the results of part (a), compute the socially-optimal 2 level in the low-demand community. Also compute the level of social surplus in that community at the optimum. 0) Repeat part (b) for the high-demand community. Add the social surplus levels from

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