Posted by
**Anna** on
.

Please help me understand the problem provided below and suggest a solution. I thank you for your time and cooperation.

Consider a public goods problem in which each person has the same income M and preferences as given by

Uj=ln(g1+...+gN)+3ln(Cj)

Assume for simplicity that the price of both goods is equal to one.

a) Solve for the privately optimal value of g for each individual.

b) Solve for the socially optimal value of g for each individual.