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. 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? 2 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. Jack Carry 1 pail Carry 2 pails $ $ $ Carry 1 pail 10 What is the equilibrium outcome? for each for Jack for Jill Jill $ Carry 2 pails 5 10 for Jack for Jill for each
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. 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? 2 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. Jack Carry 1 pail Carry 2 pails $ $ $ Carry 1 pail 10 What is the equilibrium outcome? for each for Jack for Jill Jill $ Carry 2 pails 5 10 for Jack for Jill for each
Principles of Microeconomics
7th Edition
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter22: Frontiers Of Microeconomics
Section: Chapter Questions
Problem 6PA
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Transcribed Image Text: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.
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?
2 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.
Jack
Carry 1 pail
Carry 2 pails
+A
Carry 1 pail
1
5 *for Jack
for Jill
10
for each
What is the equilibrium outcome?
Jill
$
$
$
Carry 2 pails
5
10
2
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.
Jack will carry one pail of water and Jill will carry two.
for Jack
for Jill
for each
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