Yes
No
Is the second "in" in the example sentence optional?
I`d say it`s rather necessary than optional.
Our problem lies not in what to do but in how to do it.
Our problem lies in...but not in....
I might be wrong, but I think that the preposition in is necessary here.
Lie is an intransitive verb whose meaning is to consist or have as a basis and it is often used with the preposition in:
The strength of his performance lies in his training.
lie - Definitions from Dictionary.com
Thank you.
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