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Consider a one-period economy with a representative agent with this utility function: U = 0.5[ln(C)] - 10*N C is consumption and N is labor. Output
Consider a one-period economy with a representative agent with this utility function: U = 0.5[ln(C)] - 10*N C is consumption and N is labor. Output is made this way: Y = 5N And output is spent on consumer goods (C) and exogenous government output (G>=0): Y = C + G If the government's goal is to maximize this representative agent's subjective utility, what is the optimal level of exogenous government output? Answer with a precise number
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