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Imagine that there are two goods C and F. C is private in nature and F is public in nature. The prices of the two
Imagine that there are two goods C and F. C is private in nature and F is public in nature. The prices of the two goods are equal to 1. In the economy we have three individuals. The preferences of individual i are represented with the following utility function U (Ci, F) = log(Ct) + log(F), where C, dentoes the amount of the private good consumed by agent i and F = F1 + F2 + Es is the total amount of the public good delivered in the economy. Imagine that incomes of the three individuals are the same and equal to 24. Furthermore, assume that we know that F2 = 2 and Fs = 4. What is the value of Fl in this case? ton ions 0 3 06 O 12 09
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