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Solution Preview - lic good g. Preferences are given by Ui=?lnx1i+1-?lnx2i+lnGWhere, G=g1+g2 Ui=?lnx1i+1-?lnx2i+lng1+g2Budget Constraint for both individuals x11+x21+g1?Lx12+x22+g1?LIndividual 1 chooses to maximize L= ?lnx11+1-?lnx21+lng1+g2-?x11+x21+g1-LFOC: ?L?x11=?x11-?=0?L?x21=1-?x21-?=0?L?g1=1g1+g2-?=0?x11=1-?x21=1g1+g2x11+

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