Problem #-Samuelson Public Good      Econ 330- YJY 1.. Consider a community consisting of three voters, Al,…

Problem #-Samuelson Public Good     
Econ 330- YJY
1.. Consider a community consisting of three voters, Al, Bob and
Cathy. The Marginal Benefit function for each person is, for
lighthouse service G is;
MBa = 40 – 4G for Al,
MBb = 20 – 2G for Bob, and
MBc = 10 – G for Cathy. (Interpret this as demand function.)
The marginal cost of producing the government service is MC=
24.
(i).. Draw a diagram to show the marginal benefit functions for
each person and the marginal cost.
(ii). Suppose there is no government organization to provide
this public good. The lighthouse could be privately provided. Which
person would provide the public good and by how much?
(iii). What is the Pareto efficient level of the lighthouse
service?
(iv). Suppose the tax system in place is equal share system.
Among the three individuals, who would vote for the project of
community lighthouse?