9 benefits in this case 219 2361 2 05 19 benefits

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Unformatted text preview: nefits -3.61=16.85 -3.61= Club a numerical example II Club Since N is a discrete variable you solve the problem for Since N=1,2 , large number and find the maximum B(X,N)=10X-2X2-.1N-.05N2 and c(X)=X+X2 the solution the Optimal number of club members is 8 Club a numerical example III Club B(X,N)= aX-bX2-eN-fN2 c(X)= cX+dX2 c(X)= B(X,N)=10X-2X2-.2N-.05N2 and c(X,)= X+X2 Consider now cases with a=12 N*=10 D=2 e=.3. ]N*=7 Optimal club size increases with benefits of good and declines with congestion costs Nonexcludable goods with nonrivalry: Finance for efficiency and equity Finance Progressive income tax Highway- charge for less congested lanes Recreation: distribute right for exclusive Recreation: development in exchange for public facilities development Housing: require low income housing as a Housing: condition of development right condition Transportation: tax pollution and congestion for Transportation: public transport public Education: charge the rich to finance the Education: talented poor Freedom to Choose Freedom...
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This note was uploaded on 05/11/2012 for the course ECON 125 taught by Professor Zilberman during the Spring '11 term at University of California, Berkeley.

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