4-3 4-2, Rosen (2005), 7th edition Tarzan and Jane live alone in the jungle and

Question

4-3 4-2, Rosen (2005), 7th edition Tarzan and Jane live alone in the jungle and have trained Cheetah both to patrol the perimeter of their clearing and to harvest tropical fruits. Chectah can collect 3 pounds of fruit an hour and currently spends 6 hours patrolling, 8 hours picking, and 10 hours sleeping a) What are the public and private goods in this example? b) If Tarzan and Jane are each currently willing to give up one hour of patrol for 2 pounds of fruit, is the current allocation of Cheetah's time Pareto efficient? Should Cheetah be made to patrol more or less? Draw a total diagram and a per-unit diagram to help answer this question. Give an economic interpretation.

Explanation / Answer

Public good is one which has two condtions :-

1. Non rivalry

2. Non Excludability

The only goods covered in this question is tropical fruits which in this scenario is private goods as the owner can exclude others from consuming it once they are in their premises.

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