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Deborah and Janet are considering contributing toward the creation of a building mural. Each can choose whether to contribute $200 to the building mural or to keep that $200 for a new sult. Since a building mural is a public good, both Deborah and Janet will benefit from any contributions made by the other person. Specifically, every dollar that either one of them contributes will bring each of them $0.80 of benefit. For example, if both Deborah and Janet choose to contribute, then a total of $400 would be contributed to the building mural. So, Deborah and Janet would each receive $320 of benefit from the building mural, and their combined benefit would be $640. This is shown in the upper left cell of the first table. Since a new sult is a private good, if Deborah chooses to spend $200 on a new suit, Deborah would get $200 of benefit from the new suit and Janet wouldn't recelve any benefit from Deborah's cholce. If Deborah still spends $200 on a new suit and Janet chooses to contribute $200 to the building mural, Deborah would still recelve the $160 of benefit from Janet's generosity. In other words, If Deborah decides to keep the $200 for a new suit and Janet decides to contribute the $200 to the public project, then Deborah would receive a total benefit of $200 + $160 = $360, Janet would receive a total benefit of $160, and their combined benefit would be $520. This is shown in the lower left cell of the first table.

Deborah and Janet are considering contributing toward the creation of a building mural. Each can choose whether to contribute $200 to the building mural or to keep that $200 for a new sult. Since a building mural is a public good, both Deborah and Janet will benefit from any contributions made by the other person. Specifically, every dollar that either one of them contributes will bring each of them $0.80 of benefit. For example, if both Deborah and Janet choose to contribute, then a total of $400 would be contributed to the building mural. So, Deborah and Janet would each receive $320 of benefit from the building mural, and their combined benefit would be $640. This is shown in the upper left cell of the first table. Since a new sult is a private good, if Deborah chooses to spend $200 on a new suit, Deborah would get $200 of benefit from the new suit and Janet wouldn't recelve any benefit from Deborah's cholce. If Deborah still spends $200 on a new suit and Janet chooses to contribute $200 to the building mural, Deborah would still recelve the $160 of benefit from Janet's generosity. In other words, If Deborah decides to keep the $200 for a new suit and Janet decides to contribute the $200 to the public project, then Deborah would receive a total benefit of $200 + $160 = $360, Janet would receive a total benefit of $160, and their combined benefit would be $520. This is shown in the lower left cell of the first table.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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o When Deborah contributes to the building mural and Janet doesn't, or vice versa O When both Deborah and Janet contribute to the building mural O When neither Deborah nor Janet contributes to the building mural Now, consider the incentive facing Deborah individually. The following table looks similar to the previous one, but this time, it is partially completed with the individual benefit data for Deborah. As shown previously, if both Deborah and Janet contribute to a public good, Deborah receives a benefit of $320, On the other hand, if Janet contributes to the building mural and Deborah does not, Deborah receives a benefit of $360, Complete the right-hand column of the following table, which shows the individual benefits of Deborah. Hint: You are not required to consider the benefit of Janet. Janet Contribute Doesn't contribute Contribute $320, - Deborah Doesn't contribute $३60, -- If Janet decides to contribute to the building mural, Deborah would maximize her benefit by choosing On the other hand, if Janet decides not to contribute to the building mural, Deborah would maximize her benefit by choosing v to the building mural. v to the building mural. These results illustrate tv MacBook Ai DII F2 F3 F4 F5 F6 F7 %23 %24 3. 4. W R T. Y LLI
Transcribed Image Text:o When Deborah contributes to the building mural and Janet doesn't, or vice versa O When both Deborah and Janet contribute to the building mural O When neither Deborah nor Janet contributes to the building mural Now, consider the incentive facing Deborah individually. The following table looks similar to the previous one, but this time, it is partially completed with the individual benefit data for Deborah. As shown previously, if both Deborah and Janet contribute to a public good, Deborah receives a benefit of $320, On the other hand, if Janet contributes to the building mural and Deborah does not, Deborah receives a benefit of $360, Complete the right-hand column of the following table, which shows the individual benefits of Deborah. Hint: You are not required to consider the benefit of Janet. Janet Contribute Doesn't contribute Contribute $320, - Deborah Doesn't contribute $३60, -- If Janet decides to contribute to the building mural, Deborah would maximize her benefit by choosing On the other hand, if Janet decides not to contribute to the building mural, Deborah would maximize her benefit by choosing v to the building mural. v to the building mural. These results illustrate tv MacBook Ai DII F2 F3 F4 F5 F6 F7 %23 %24 3. 4. W R T. Y LLI
Deborah and Janet are considering contributing toward the creation of a building mural. Each can choose whether to contribute $200 to the building mural or to keep that $200 for a new sult. Since a bullding mural is a public good, both Deborah and Janet will benefit from any contributions made by the other person. Specifically, every dollar that either one of them contributes will bring each of them $0.80 of benefit. For example, if both Deborah and Janet choose to contribute, then a total of $400 would be contributed to the building mural. So, Deborah and Janet would each receive $320 of benefit from the building mural, and their combined benefit would be $640. This is shown in the upper left cell of the first table. Since a new suit is a private good, if Deborah chooses to spend $200 on a new suit, Deborah would get $200 of benefit from the new suit and Janet wouldn't recelve any benefit from Deborah's choice. If Deborah still spends $200 on a new suit and Janet chooses to contribute $200 to the building mural, Deborah would still receive the $160 of benefit from Janet's generosity. In other words, if Deborah decides to keep the $200 for a new suit and Janet decides to contribute the $200 to the public project, then Deborah would receive a total benefit of $200 + $160 = $360, Janet would receive a total benefit of $160, and their combined benefit would be $520. This is shown in the lower left cell of the first table. Time Complete the following table, which shows the combined benefits of Deborah and Janet as previously described. Janet Contributes Doesn't contribute Contributes $640 Deborah Doesn't contribute $520 s Of the four cells of the table, which gives the greatest combined benefits to Deborah and Janet? When Deborah contributes to the building mural and Janet doesn't, or vice versa O When both Deborah and Janet contribute to the building mural O When neither Deborah nor Janet contributes to the building mural Now, consider the incentive facing Deborah individually. The following table looks similar to the previous one, but this time, it is partially completed with the individual benefit data for Deborah. As shown previously, if both Deborah and Janet contribute to a public good, Deborah receives a benefit of $320. On the other hand, if Janet contributes to the building mural and Deborah does not, Deborah receives a benefit of $360. Complete the right-band.column of the following table which shows the individual benefits of Deborah stv MacBook Air DII F7 F4 F5 FB F3 %23 %24 & 3. 6. Y W 00
Transcribed Image Text:Deborah and Janet are considering contributing toward the creation of a building mural. Each can choose whether to contribute $200 to the building mural or to keep that $200 for a new sult. Since a bullding mural is a public good, both Deborah and Janet will benefit from any contributions made by the other person. Specifically, every dollar that either one of them contributes will bring each of them $0.80 of benefit. For example, if both Deborah and Janet choose to contribute, then a total of $400 would be contributed to the building mural. So, Deborah and Janet would each receive $320 of benefit from the building mural, and their combined benefit would be $640. This is shown in the upper left cell of the first table. Since a new suit is a private good, if Deborah chooses to spend $200 on a new suit, Deborah would get $200 of benefit from the new suit and Janet wouldn't recelve any benefit from Deborah's choice. If Deborah still spends $200 on a new suit and Janet chooses to contribute $200 to the building mural, Deborah would still receive the $160 of benefit from Janet's generosity. In other words, if Deborah decides to keep the $200 for a new suit and Janet decides to contribute the $200 to the public project, then Deborah would receive a total benefit of $200 + $160 = $360, Janet would receive a total benefit of $160, and their combined benefit would be $520. This is shown in the lower left cell of the first table. Time Complete the following table, which shows the combined benefits of Deborah and Janet as previously described. Janet Contributes Doesn't contribute Contributes $640 Deborah Doesn't contribute $520 s Of the four cells of the table, which gives the greatest combined benefits to Deborah and Janet? When Deborah contributes to the building mural and Janet doesn't, or vice versa O When both Deborah and Janet contribute to the building mural O When neither Deborah nor Janet contributes to the building mural Now, consider the incentive facing Deborah individually. The following table looks similar to the previous one, but this time, it is partially completed with the individual benefit data for Deborah. As shown previously, if both Deborah and Janet contribute to a public good, Deborah receives a benefit of $320. On the other hand, if Janet contributes to the building mural and Deborah does not, Deborah receives a benefit of $360. Complete the right-band.column of the following table which shows the individual benefits of Deborah stv MacBook Air DII F7 F4 F5 FB F3 %23 %24 & 3. 6. Y W 00
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