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Let xi be the amount of money a consumer has to spend. This xi value is determined by the individual's initial wealth (wi ) and
Let xi be the amount of money a consumer has to spend. This xi value is determined by the individual's initial wealth (wi ) and any contribution he makes to provision of a public good (ri ). In particular, xi=wiri . Finally, let G be a binary variable that takes on a value of 1 if the public good is provided and 0 if it is not provided. Generally speaking, whether or not provision of a public good is a Pareto improvement will depend on initial wealth for which of the following utility functions (where vi(G) is a function that depends on whether or not the public good is provided)? Choose one or more: A. u(xi,G)=xi3+vi(G) B. u(xi,G)=xi+vi(G) C. u(xi,G)=xi+vi(G) D. u(xi,G)=xi2+vi(G)
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