Jack and Jill are the only two suppliers of water intheir village. They go up the hill once a day andcome back carrying one bucket of water each (eachhas one small and one large bucket). They can eachchoose the big bucket that brings 40 gallons ofwater, or the small bucket that brings 15 gallons ofwater.If both use the big buckets (40-gallon buckets):they bring down a total of 80 gallons of water (totalproduction) that they sell to the villagers; theyequally split the market. They each make $1,400 inprofit.If both use the small buckets (15-gallons buckets):they produce a total of 30 gallons of water that theysell to the villagers, once again they equally split themarket. They each make $1,650 profit.If one uses the big bucket and the other uses thesmall bucket (for a total production of 55 gallons),then:the one with small bucket gets $1,200 profitthe one with the big bucket gets $2,000 profitJack is the row1. Draw the payoff matrix (1player and Jill is the column player. The strategiesand payoffs are given above. 2 (bfor Jack to producefor Jill to produceJack's profit would beThe cooperative outcome would begallons of water andgallons of water; this wayand Jill's profitwould be3.) Do either have a dominant strategy?Jack's doinant strategy isJill's dominant strategy isand4.game (Nash equilibrium and dominant strategyequilibrium)? The Nash equilibrium is where Jackproducesgallons of water. In the Nash equilibrium,Jack's profit isWhat will be the outcome of thegallons of water and Jill producesand Jill's profit is

In game theory, a Nash Equilibrium is a set of strategies, one for each participant in a social…

Jack and Jill are the only two suppliers of water in their village. They go up the hill once a day and come back carrying one bucket of water each (each has one small and one large bucket). They can each choose the big bucket that brings 40 gallons of water, or the small bucket that brings 15 gallons of water.

Jack and Jill are the only two suppliers of water in their village. They go up the hill once a day and come back carrying one bucket of water each (each has one small and one large bucket). They can each choose the big bucket that brings 40 gallons of water, or the small bucket that brings 15 gallons of water.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Jack and Jill are the only two suppliers of water in
their village. They go up the hill once a day and
come back carrying one bucket of water each (each
has one small and one large bucket). They can each
choose the big bucket that brings 40 gallons of
water, or the small bucket that brings 15 gallons of
water.
If both use the big buckets (40-gallon buckets):
they bring down a total of 80 gallons of water (total
production) that they sell to the villagers; they
equally split the market. They each make $1,400 in
profit.
If both use the small buckets (15-gallons buckets):
they produce a total of 30 gallons of water that they
sell to the villagers, once again they equally split the
market. They each make $1,650 profit.
If one uses the big bucket and the other uses the
small bucket (for a total production of 55 gallons),
then:
the one with small bucket gets $1,200 profit
the one with the big bucket gets $2,000 profit
Jack is the row
1. Draw the payoff matrix (1
player and Jill is the column player. The strategies
and payoffs are given above.

2 (b
for Jack to produce
for Jill to produce
Jack's profit would be
The cooperative outcome would be
gallons of water and
gallons of water; this way
and Jill's profit
would be
3.
) Do either have a dominant strategy?
Jack's doinant strategy is
Jill's dominant strategy is
and
4.
game (Nash equilibrium and dominant strategy
equilibrium)? The Nash equilibrium is where Jack
produces
gallons of water. In the Nash equilibrium,
Jack's profit is
What will be the outcome of the
gallons of water and Jill produces
and Jill's profit is

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