Sam and John are neighbors. Sam has a tree in his backyard whose roots are beginning to break the plumbing lines to John’s house. Suppose the tree's benefit is worth $750 to Sam, and John is willing to pay up to $1200 to protect his plumbing lines. A possible private solution is that: choose from the answers below Group of answer choices a. Sam pays $1000 to John to repair his plumbing lines. b. Sam pays $1150 to John to repair his plumbing lines. c. John pays Sam $1300 to cut down the tree. d. John pays Sam $1100 to cut down the tree
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Sam and John are neighbors. Sam has a tree in his backyard whose roots are beginning to break the plumbing lines to John’s house. Suppose the tree's benefit is worth $750 to Sam, and John is willing to pay up to $1200 to protect his plumbing lines. A possible private solution is that: choose from the answers below
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- Jimi loves turning up his electric guitar amp all theway, but his next-door neighbor hates listening tohim. How might Jimi and his neighbor reach a private solution to their problem? Describe potentialproblems that might make it hard for a privatesolution to occurSuppose that speeding imposes externalities on other people resulting in a social cost of $50. A town is considering hiring an extra police officer to give out speeding tickets. If we want to maximize social welfare (absent enforcement costs), which 13. of the following statements are true? (Assume risk neutral drivers.) If the probability of detection with the extra police officer is 10%, then a a) speeding ticket should cost $55. If the probability of detection with the extra police officer is 10%, then a b) speeding ticket should cost $500. If the probability of detection with the extra police officer is 100%, then no one c) will speed. If the probability of detection with the extra police officer is 90%, then a speeding ticket should cost $59 None of the above d) e) What happens to the socially optimal cost of the speeding ticket if the town decides to hire the police officer? 14. b) It goes up a) It goes down c) The amount that it goes down depends on salary of the police officer…Q3. Imagine that two partners are trying to divide up $66. Imagine that this game is played only once and that player 1 gets to decide how to divide the $66. Upload a picture of the game tree. You only need to include a minimum of 5 branches.
- you and a friend decide to run a three mile race. If you agree to run together, you keep up with himfor the first mile, but you overexert yourself and run the last two miles at slower paces on your own. Tomake up for lost time, your friend runs the last two miles at a faster pace. Your mile times are 6:30, 7:00,and 7:30. Your friend’s times are 6:30, 6:00, and 6:00. If you both agree to run on your own, you run aconstant pace of 7:05 while your friend runs at a constant pace of 6:05. If you want to run together butyour friend wants to run solo, he runs his constant pace of 6:05. You, on the other hand, want to showhim that you can run faster, but you end up overexerting yourself after the first mile. You run times of6:20, 7:05, and 7:30. If he wants to run together but you do not, you both run at your pace of 7:05. Thissituation can be turned into an economic game, with the payoffs the overall race times. You each wantto run the fastest time you possibly can.(a) Who are the players in…Jay is a smoker living in city A. The price for a pack of cigarettes is $6 in city A. The benefit of smoking a pack of cigarettes for Jay is worth $14. Assume that each pack of cigarettes smoked does $6 worth of health damage to the smoker (Jay) in the form of increased cancer risk and $5 worth of health damage to the smoker's neighbors via secondhand smoke. What is the private cost incurred whenever Jay buys a pack of cigarettes (consider all the costs to Jay, including purchase cost and cost of health damage) ? (Please provide one number as the answer, without dollar sign, space, or any other symbol) Is it privately efficient for him to buy a pack of cigarettes at this price? (please input Yes or No, without any other word, symbol or space) What is the public benefit when Jay buys a pack of cigarettes (consider benefits to everyone in the society, in this case, the benefit is to Jay only) ? (Please provide one number as the answer, without dollar sign, space, or any other symbol)…2. There are two ice-cream stores, each of whom chooses a position from ten spots along the beach: spot 1, 2, 3, ...10. The ten spots are lined up and separated 100 meters from each other. 1 2 3 4 5 6 7 8 9 10 The consumers are equally distributed across these ten spots. Consumers buy from the store whose spot is closest to theirs. If the two stores are equidistant from a given spot, the consumers at that position split their consumption equally. The aim of the ice-cream stores is to maximize their share of the total ice-cream consumption. a. Is there any dominated strategy? If so, spell out explicitly how one strategy is dominated by another strategy. b. Is there any iterated dominance equilibrium?
- Acres Sophia Amber Cedric 1 $12 $24 $6 8. 18 6. 3 10 4 3 3 4 1 2 Consider the town of Springfield with only three residents, Sophia, Amber, and Cedric (see the Table). The three residents are trying to determine how large, in acres, they should build the public park. Suppose the cost to build the park is $12 per acre and that the residents have agreed to split the cost of building the park equally. If the residents vote to determine the size of park to build, basing their decision solely on their own willingness to pay (and trying to maximize their own surplus), what is the largest park size for which the majority of residents would vote "yes?" 1 acre 3 acres 2 acres 4 acres Question 25 of 25 A Click Submit to complete this assessment.Consider the following public good provision game. There are 3 players with private infor- mation about their costs of contributing for the public good. Players have two actions: contribute or don't contribute. If at least two players contribute for the public good, then they all get a payoff of 1. If less than two players contribute, then all receive zero payoff. Only the players who contribute for the public good pays the cost. The costs are either a or 0.8 and each is equally likely. (a) Find the highest value of r in a Bayesian Nash equilibrium where all players with type r contributes and all players with type 0.8 don't. (b) Now suppose that costs are either 0.2, 0.5 or 0.8 and all three are equally likely. Find a Bayesian Nash equilibrium in which players with type 0.2 always provide, players with type 0.8 never provide and players with type 0.5 uses a mixed strategy in which they provide with probability p > 0. Find the value of p.Tom, Mary and Jill have apartments in the same building. A security system for their building costs $750. Tom is willing to pay $100 for the security system, Mary is willing to pay $300 and Jill is willing to pay $300. They have a meeting to vote on whether to pay $250 each for the security system. At least two of them must vote for the system to be installed before the vote is passed. The efficient outcome is to have the security system installed. After the meeting the security system will, which illustrates_____________________. Question 1 options: be installed, the free rider problem not be installed, the free rider problem be installed, a negative externality not be installed, a negative externality
- You and your roomate are deciding whether to go to a party or not on Friday. Going to the party is fun and gives a benefit of 4. If you go to the party, there is a 50% chance you will get covid. If you do not attend the party but your roommate does and gets covid, there is 80% chance that you will get covid. The impact of getting covid is -10. If both of you stay home, you will not be exposed to covid and will not have fun, leading to a payoff of 0 for both of you. 3. Construct a game matrix based on the description above and find any (c) Nash equilibria. How would your answer change if one roomate was less social and enjoyed (d) partying less than the other? Change the payoff matrix in a way that is both consistent with one roommate being less social than the other and changes the prediction you found in (a). (Note: if you found multiple possible equilibria in (a), changing the outcome could mean either making one of your prior Nash equilbria the only Nash equilibrium or making an…Three roommates are trying to renovate their kitchen. They decided to vote on whether or not it is worth renovating. If at least 2 people vote for the renovation, then it will happen and everyone would split the costs of renovation equally. Their utility functions are U1= (1+ R)y1; U2 = (2 + R)Y2 and U3 if the kitchen is renovated and 0 otherwise, and y;is the amount of money i spends on private consumption. Agent 1 has $900; Agent 2 has $2100 and Agent 3 has $1500; renovation project costs $1500 total. (3 + R)y3, where R=1 1. Will the house be renovated if no bribes are allowed? 2. Can they reach an agreement so that the house ends up being renovated?7. A farmer can either invest in irrigation for their farm or not. There's a 30% chance that they will receive adequate rain such that the irrigation is not necessary, and a 70% chance that the irrigation will be useful if acquired. Assume that the farmer will receive $5,000 if their crops are adequately watered, and $1,000 otherwise. Irrigation costs $3,000. For simplicity, assume this is a one-off game and that nature is not perverse.a. Draw the extensive form of this game, with the farmer acting first and nature second.b. What is the expected value of each strategy for the farmer?c. What is the expected value of perfect information on the weather?