Suppose you have preferences over two normal goods: the number of trees in your neighborhood (T) and a composite good (C). Specifically, your utility function is given by U(T, C) = T C and you have income Y0. The trees in your neighborhood are publicly provided so you are not free to chose your preferred level of T. However, you are free to purchase any level of C that you want, provided you can afford it. Under these conditions, your optimization problem can be written as max {C} T C s.t. Y0 = PC C. Since you cannot spend money on increasing the number of trees (T), there is no trade off between goods, so the solution to your optimization problem clearly entails spending all of your income on C [Note: We're assuming there is only one period - i.e. no future - so there is no point in saving money]. Normalizing the price of C to $1 and substituting the budget constraint into the utility function, your maximized utility can be written as U = p T Y0. Currently, you have $5,000 in income and there are 8 trees in your neighborhood. U