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Derive the equation that completely describes efficient allocations of public good Z in an economy populated by two agents (1, 2) and two goods
Derive the equation that completely describes efficient allocations of public good Z in an economy populated by two agents (1, 2) and two goods (Z, Y) with quasilinear utility given as U1 = InZ1 + 2 In Y1 and U2 = 2 In Z2 + In Y2. Production possibility frontier is Y1 + Y2 = 120 Z. Graph your answer (Hint: MC(Z) = == 1)
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