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PEA 2026Question 18mcqModerate Under review
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Two agents AA and BB have utilities uA=xA+y,uB=2xB+y,u_A = x_A + y, \qquad u_B = 2x_B + y, where xA,xBx_A, x_B are amounts of a private good and yy is the amount of a public good. Production satisfies y+m(xA+xB)=1y + m(x_A + x_B) = 1, with m(0,1)m \in (0,1). Suppose a social planner decides that one unit should be produced. For what value of mm will the resulting allocation be Pareto optimal?

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