5. Let there be two consumers 1 and 2, and two goods X and Y. The utility functions are U = 20.5y, 0.5 and U2 = 20.5420.

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5 Let There Be Two Consumers 1 And 2 And Two Goods X And Y The Utility Functions Are U 20 5y 0 5 And U2 20 5420 1 (35.41 KiB) Viewed 36 times

5. Let there be two consumers 1 and 2, and two goods X and Y. The utility functions are U = 20.5y, 0.5 and U2 = 20.5420.5, where c; and Yi, i = 1,2 are the amount of good bought by agent i, x= I1 + 12. i) Is good x a public good? ii) The income of the two consumers is Rs. 400 each. Assume that the prices of good X and Y are Rs. 2 and Rs. 4 respectively. Calculate the level of utilities if they contribute half of their income in the consumption of good X.