Chat with us, powered by LiveChat In this problem, you will compare the level of a public good chosen under majority voting wit | EssayAbode

08 Apr In this problem, you will compare the level of a public good chosen under majority voting wit

In this problem, you will compare the level of a public good chosen under majority voting with the socially optimal level under three different sets of circumstances. Suppose first that individual i’s demand curve for z is given by αi/z, where αi is a positive parameter. Instead of being linear, this demand curve is a hyperbola. Suppose further that z costs \$1 per unit to produce (c = 1) and that this cost is shared equally among consumers. Therefore, cost per person is 1/n per unit of z. Then consider the three sets of circumstances listed below. Each situation has a different number of consumers in the economy and different collections of α values for the consumers. The number of consumers is denoted by n and the vector of α values by A = (α1, α2, . . . , αn – 1, αn).

Case 1: n = 7, A = (4, 2, 12, 4, 5, 13, 8).

Case 2: n = 5, A = (10, 6, 11, 14, 8).

Case 3: n = 9, A = (6, 9, 10, 4.5, 12, 7, 13.5, 8, 11).

Using this information, do the following:

(a) For each case, compute the preferred z level for each voter. Identify the median voter, and indicate the z level chosen under majority voting.

(b) For each case, compute the D∑ curve, and find the socially optimal level of z.

(c) For each case, compare the z level under majority voting with the socially optimal z. Explain the difference (if any) between the two z values.

Related Tags

Academic APA Assignment Business Capstone College Conclusion Course Day Discussion Double Spaced Essay English Finance General Graduate History Information Justify Literature Management Market Masters Math Minimum MLA Nursing Organizational Outline Pages Paper Presentation Questions Questionnaire Reference Response Response School Subject Slides Sources Student Support Times New Roman Title Topics Word Write Writing