an economy consists of two individuals, A and B and two goods, a private good, which is called good 1, and a public good, which is called good 2. Each individual i = A, B is endowed with 24 units of time, which can be used to produce an amount x1 of a private good at a labour cost of x1 units of time, and an amount x2 of a public good at a labour cost of 1×2 units of time.
Solution
In this economy, there are two individuals, A and B, and two goods: a private good (good 1) and a public good (good 2). Each individual is endowed with 24 units of time, which can be used to produce the goods.
Attributes:
- Individuals: A, B
- Goods: Good 1 (private good), Good 2 (public good)
- Endowment: 24 units of time for each individual
- Production costs:
- Private good (Good 1): x1 units of time
- Public good (Good 2): 1×2 units of time
To summarize:
- Individuals: A, B
- Goods: Good 1 (private good), Good 2 (public good)
- Endowment: 24 units of time for each individual
- Production costs:
- Private good (Good 1): x1 units of time
- Public good (Good 2): 1×2 units of time
