Cowflop, WI has 1,000 people. Every year they have a fireworks show on the Fourt
ID: 1100925 • Letter: C
Question
Cowflop, WI has 1,000 people. Every year they have a fireworks show on the Fourth of July. The citizens are interested in only two things, drinking milk and watching fire-works. Fireworks cost 1 gallon of milk per unit. People in Cowflop have identical utility functions Ui(xi, g)=xi+g1/2/20, where xi is the number of gallons of milk per year con-sumed by citizen i, and g is the number of units of fireworks exploded in the towns Fourth of July extravaganza. (Private use of fireworks is outlawed.) Find the Pareto optimal amount of fireworks for Cowflop.
Explanation / Answer
check page no 11 and question no 2.2
http://www.econ.ucsb.edu/~tedb/Courses/UCSBpf/pflectures/Lec2.pdf