4 Jill and Jack both have two pails that can be used to carry water down from a hill. Each makes only one trip down the hill, and each pail of water can be sold for $5. Carrying the pails of water down requires considerable effort. Both Jill and Jack would be willing to pay $4 each to avoid carrying one pail down the hill, and an additional $4 to avoid carrying a second pail down the hill. at a. If Jack and Jill each must decide whether to carry one or two pails of water down from the top of the hill, how many pails will each child choose to carry? pail(s) b. Jill and Jack's parents are worried that the two children don't cooperate enough with one another. Suppose they make Jill and Jack share equally their revenues from selling the water. Given that both are self-interested, construct the payoff matrix for the decisions Jill and Jack face regarding the number of pails of water each should carry. Instructions: In the payoff matrix below, enter the payoffs for each child for each possible combination of strategies. Entries should represent the net benefit to each player. Enter your responses rounded to two decimal places. If you are entering a negative number, be sure to include a negative (-) sign in front of that number. Carry 1 pail Jack Carry 2 pails $[ $ $ Carry 1 pail for each for Jack for Jill What is the equilibrium outcome? Jill Carry 2 pails for Jack $ $ for Jill $ for each Jack will carry one pail of water and Jill will carry two. Each will carry two pails of water. Jack will carry two pails of water and Jill will carry one. Each will carry one pail of water.
4 Jill and Jack both have two pails that can be used to carry water down from a hill. Each makes only one trip down the hill, and each pail of water can be sold for $5. Carrying the pails of water down requires considerable effort. Both Jill and Jack would be willing to pay $4 each to avoid carrying one pail down the hill, and an additional $4 to avoid carrying a second pail down the hill. at a. If Jack and Jill each must decide whether to carry one or two pails of water down from the top of the hill, how many pails will each child choose to carry? pail(s) b. Jill and Jack's parents are worried that the two children don't cooperate enough with one another. Suppose they make Jill and Jack share equally their revenues from selling the water. Given that both are self-interested, construct the payoff matrix for the decisions Jill and Jack face regarding the number of pails of water each should carry. Instructions: In the payoff matrix below, enter the payoffs for each child for each possible combination of strategies. Entries should represent the net benefit to each player. Enter your responses rounded to two decimal places. If you are entering a negative number, be sure to include a negative (-) sign in front of that number. Carry 1 pail Jack Carry 2 pails $[ $ $ Carry 1 pail for each for Jack for Jill What is the equilibrium outcome? Jill Carry 2 pails for Jack $ $ for Jill $ for each Jack will carry one pail of water and Jill will carry two. Each will carry two pails of water. Jack will carry two pails of water and Jill will carry one. Each will carry one pail of water.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:4
Jill and Jack both have two pails that can be used to carry water down from a hill. Each makes only one trip down the hill, and
each pail of water can be sold for $5. Carrying the pails of water down requires considerable effort. Both Jill and Jack would
be willing to pay $4 each to avoid carrying one pail down the hill, and an additional $4 to avoid carrying a second pail down
the hill.
nt
a. If Jack and Jill each must decide whether to carry one or two pails of water down from the top of the hill, how many pails
will each child choose to carry?
pail(s)
b. Jill and Jack's parents are worried that the two children don't cooperate enough with one another. Suppose they make Jill
and Jack share equally their revenues from selling the water. Given that both are self-interested, construct the payoff matrix
for the decisions Jill and Jack face regarding the number of pails of water each should carry.
Instructions: In the payoff matrix below, enter the payoffs for each child for each possible combination of strategies. Entries
should represent the net benefit to each player. Enter your responses rounded to two decimal places. If you are entering a
negative number, be sure to include a negative (-) sign in front of that number.
Carry 1 pail
Jack
Carry 2
pails
O O O
$
$
$
Carry 1 pail
for each
for Jack
for Jill
What is the equilibrium outcome?
Jill
$
$
Carry 2 pails
for Jack
for Jill
for each
Jack will carry one pail of water and Jill will carry two.
Each will carry two pails of water.
Jack will carry two pails of water and Jill will carry one.
Each will carry one pail of water.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education