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help me solve this question Assume that the only value of having a perfect front yard/lawn over one filled with wild plants is its benefit

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Assume that the only value of having a perfect front yard/lawn over one filled with wild plants is its benefit as a positional good (i.e. it is a status good - shows you're "high class"). It costs $1,500 per year to keep your yard/lawn in perfect condition (watering, fertilizer, chemicals to kill weeds, labour, etc.). Wild yards have no maintenance costs. If you are "high class" and your neighbour isn't, you get a positional "utility" benefit that you value at $6,000 (from feeling better about yourself, being more popular, etc.). If your neighbour has a perfect yard/lawn and you don't, you feel "low class" and experience reduction of utility of -$4,000. The following payoff matrix summarizes this scenario: Neighbour has: Perfect yard/lawn Wild yard/lawn Perfect yard/lawn You = -$1,500 You = +$4,500 You have: Neighbour= -$1,500 Neighbour= -$4,000 Wild yard/lawn You = -$4,000 You = $0 Neighbour= +$4,500 Neighbour= $0 18. If your neighbour has a wild yard/lawn, what is your utility maximizing strategy? Explain. 19. If your neighbour has a perfect yard/lawn, what is your utility maximizing strategy? Explain? 20. If you and your neighbour cannot influence each others (you take each others decision about yard/lawn care as given), what is the equilibrium outcome in terms of yard/lawn care choice? 21. Is this equilibrium socially efficient? Explain. 22. What type of externality is this situation an example of? 23. Is it consistent with the textbookeoclassical model of consumer behaviour? Why or why not? 3 of 5

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