How much of the public good will be produced and by whom?
Yootles.com is the resource.
See attached file for full problem description.
1) Preferences are an important concept in economics, and they can be represented with utility functions. Let X be the consumption set, the set of all mutually-exclusive packages the programmers could conceivably produce (such as an indifference curve map without the indifference curves). The programmers' utility functions rank each package in the consumption set. If u(x) > u(g) the programmers strictly prefer x to g.
The utility function in this case isn't linear, indicating that the slope changes from one value of x to another. Note that the exponents on the utility function in this problem indicate that the programmers value X more than g. You will need to use some calculus to determine the solution to this problem numerically. You can see this by asking, for example, should I spend this next dollar on pizza or ice cream? If I spend the dollar on pizza, how much extra pizza can I get? (Let's say l/8 extra pizza.) And if I consume ...
Use of a local currency to determine preferences is provided in the solution.