Assume now however that the second sector produces, not a traded good, but a
publicly provided service. Suppose, that we allow for the possibility that the quantity
provided of that good depends on population size H and composition l so that
y
B = Γ(H, l), say (where this would be proportional to H for a publicly provided
private good, independent of H for a pure public good and so on). Provision is
nonetheless cost efficient so that the ratio between wages and returns to capital is still
equated to the ratio of their marginal products