I would like some assistance with the following public finance economics question
NB. To differentiate equation 4, take the log of both sides of the equation
Consider the concave utility possibilities frontier corresponding to:
(eq 1)
1/2 U(Norman) + UEdna) 16
Associated with the Social Welfare Function of the form:
U(Norman) U(Edna)
U =
Given the utility functions of Norman and Edna as follows:
U(Norman) 19chips + 19 coke
1/4
U(Edna) = chips
. coke
1- Calculate the maximizing level of utilies for Norman and Edna.
NB. To differentiate equation 4, take the log of both sides of the equation
II- Calculate the allocations of Output
*
1/4
(eq 2)
(eq3)