Question

Tom and Jerry are roommates. They spend a total of 80 hours a week together in their room. Tom likes loud music, even when he sleeps. His utility function is UT (CT,M) = CT + M, where CT is the number of cookies he eats per week and M is the number of hours of loud music per week that is played while he is in their room. Jerry hates all kinds of music. His utility function is UJ(CJ,M) = CJ − M2/12. Every week, Tom and Jerry each get two dozen chocolate chip cookies sent from home. They have no other source of cookies. In this economy, a cookie is a and music is a .

which is public good and which is private good?

Answer 1

In this economy,

Cookies is a private good and

Music is a public good.

Explanation:

A private good is one for which its owner can exclude others from using it, and once it has been consumed, it cannot be used again, Here Tom and Jerry each are owners of 2 dozen cookies and they can exclude one another from consuming their own cookies also once they eat their cookies, it cannot be consumed again.

While,

Public goods are generally open for all to use and consumption by one party does not deter another party's ability to use it. It is also not excludable; preventing the use of the good by another is not possible. And here Music is a public good as it satisfies all the characteristic of a public good ( Jerry cannot deter himself from the consumption of music as they both share a room even when he don't want to listen it).