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Consumer's problem and externalities Problem III. Neighbor with a Garden {35 points} Mary and Elizabeth are two neighbors. L'Iary has a garden in front ofher

Consumer's problem and externalities

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Problem III. Neighbor with a Garden {35 points} Mary and Elizabeth are two neighbors. L'Iary has a garden in front ofher house. She gets utility from having that garden, 5;, as well as her general consumption, CM, Le. \"MES: cu} = 41M Ink?) +].n{r:,\"r]. Elizabeth has no garden but earns utility on Mary's garden as well as her general consumption, i.e. 113(91 cg]- = of. |n{g}| + |n{c5-] where :13 <: a price of the consumption good is p and gardening servims q. their income denoted by ie. l. down problems both consumers determine optimal bundles be clear about each person choice variables. points social plauner problem nd out pareto bundle how does private optimum dier from it market failure type failure. suest based solution which matches to opti- mum. prove it.>

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