Consider an economy with two goods, a public good (x) and labor (n). Individual utility is given by Ui = ln(x) + li where x = x1 +x2 and li = 24?ni . There is a competitive market producing the public good using the technology: x = 5n = 5(n1 + n2)

(a)(9 pts) Find the competitive equilibrium allocation and prices.

(b)(9 pts) Find the ecient allocation.

Consider an economy with two goods, a public good (x) and labor (n). Individual utility is given by Ui = In(x) +li where x = x1+2 and li = 24-ni. There is a competitive market producing the public good using the technology: x = 5n = 5(n1 + n2) (a) (9 pts) Find the competitive equilibrium allocation and prices. (b) (9 pts) Find the ecient allocation