Question 38 (5 points) (5 Points) Using the model of public good, suppose that output is produced, as in the simplified model with proportional taxation, with labour and z = 1. However, there is lump-sum taxation, and the PPF is given by Y=h-l-G. Now the consumer has preferences over three goods: private goods C, public goods G, and leisure I. Assume that Cand [are perfect complements for the consumer, that is, the consumer always wants to consume Cand I in fixed proportions, with C=dland d>0. a) Suppose that public goods and private goods are perfect substitutes. Using the production possibilities frontier, we must have To have a full mark, you NEED to show your solution (with all the steps) in the midterm exam le posted under Assessment-Assignment. O a) None of the below O b) C = (1 - d) (h - G) and l d(h - G) (1 + d) (1 + d) O c ) C = d(h - G) (h - G) and l = (1 + d) (1 + d) O d) d(h - G) (h - G) 1 = and C = (1 + d) (1 + d)