A village has six residents, each of whom has accumulated savings of $100. Each villager can use this money either to buy a government bond that pays 17 percent interest per year or to buy a year-old llama, send it onto the commons to graze, and sell it after 1 year. The price the villager gets for the 2-year-old llama depends on the quality of the fleece it grows while grazing on the commons. That in turn depends on the animal's access to grazing, which depends on the number of llamas sent to the commons, as shown in the following table: Number of llamas on the commons Price per 2- year-old 11ama ($) 125 1 2 119 T 3折 116 4 113 111 109 5 6 The villagers make their investment decisions one after another, and their decisions are public. a. If each villager decides individually how to invest, how many llamas will be sent onto the commons, and what will be the resulting village income? Number of llamas: 20 Instructions: Enter your response as a whole number. Village income: $
A village has six residents, each of whom has accumulated savings of $100. Each villager can use this money either to buy a government bond that pays 17 percent interest per year or to buy a year-old llama, send it onto the commons to graze, and sell it after 1 year. The price the villager gets for the 2-year-old llama depends on the quality of the fleece it grows while grazing on the commons. That in turn depends on the animal's access to grazing, which depends on the number of llamas sent to the commons, as shown in the following table: Number of llamas on the commons Price per 2- year-old 11ama ($) 125 1 2 119 T 3折 116 4 113 111 109 5 6 The villagers make their investment decisions one after another, and their decisions are public. a. If each villager decides individually how to invest, how many llamas will be sent onto the commons, and what will be the resulting village income? Number of llamas: 20 Instructions: Enter your response as a whole number. Village income: $
Chapter32: The Land Market And Natural Resources
Section: Chapter Questions
Problem 9E
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Question
Transcribed Image Text:A village has six residents, each of whom has accumulated savings of $100. Each villager can use this money either to buy a
government bond that pays 17 percent interest per year or to buy a year-old llama, send it onto the commons to graze, and sell it after
1 year. The price the villager gets for the 2-year-old llama depends on the quality of the fleece it grows while grazing on the commons.
That in turn depends on the animal's access to grazing, which depends on the number of llamas sent to the commons, as shown in the
following table:
Number of
llamas on
the
commons
Price per 2-
year-old
11ama ($)
125
1
2
119 T
3折
116
4
113
111
109
5
6
The villagers make their investment decisions one after another, and their decisions are public.
a. If each villager decides individually how to invest, how many llamas will be sent onto the commons, and what will be the resulting
village income?
Number of llamas:
20
Instructions: Enter your response as a whole number.
Village income: $
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