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Of the four cells of the table, which gives the greatest combined benefits to Eleanor and Kyoko? O When Eleanor contributes to the public park and Kyoko doesn't, or vice versa O When neither Eleanor nor Kyoko contributes to the public park O When both Eleanor and Kyoko contribute to the public park Now, consider the incentive facing Eleanor individually. The following table looks similar to the previous one, but this time, it is partially completed. with the individual benefit data for Eleanor. As shown previously, if both Eleanor and Kyoko contribute to a public good, Eleanor receives benefit of $640. On the other hand, if Kyoko contributes to the public park and Eleanor does not, Eleanor receives a benefit of $720. Complete the right-hand column of the following table, which shows the individual benefits of Eleanor. Hint: You are not required to consider the benefit of Kyoko. Eleanor Contribute $640,-- Doesn't contribute $720,-- Contribute Kyoko Doesn't contribute $ $ If Kyoko decides to contribute to the public park, Eleanor would maximize her benefit by choosing other hand, if Kyoko decides not to contribute to the public park, Eleanor would maximize her benefit by choosing park. These results illustrate to the public park. On the to the public

Of the four cells of the table, which gives the greatest combined benefits to Eleanor and Kyoko? O When Eleanor contributes to the public park and Kyoko doesn't, or vice versa O When neither Eleanor nor Kyoko contributes to the public park O When both Eleanor and Kyoko contribute to the public park Now, consider the incentive facing Eleanor individually. The following table looks similar to the previous one, but this time, it is partially completed. with the individual benefit data for Eleanor. As shown previously, if both Eleanor and Kyoko contribute to a public good, Eleanor receives benefit of $640. On the other hand, if Kyoko contributes to the public park and Eleanor does not, Eleanor receives a benefit of $720. Complete the right-hand column of the following table, which shows the individual benefits of Eleanor. Hint: You are not required to consider the benefit of Kyoko. Eleanor Contribute $640,-- Doesn't contribute $720,-- Contribute Kyoko Doesn't contribute $ $ If Kyoko decides to contribute to the public park, Eleanor would maximize her benefit by choosing other hand, if Kyoko decides not to contribute to the public park, Eleanor would maximize her benefit by choosing park. These results illustrate to the public park. On the to the public

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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Of the four cells of the table, which gives the greatest combined benefits to Eleanor and Kyoko? O When Eleanor contributes to the public park and Kyoko doesn't, or vice versa When neither Eleanor nor Kyoko contributes to the public park O When both Eleanor and Kyoko contribute to the public park Now, consider the incentive facing Eleanor individually. The following table looks similar to the previous one, but this time, it is partially completed with the individual benefit data for Eleanor. As shown previously, if both Eleanor and Kyoko contribute to a public good, Eleanor receives a benefit of $640. On the other hand, if Kyoko contributes to the public park and Eleanor does not, Eleanor receives a benefit of $720. Complete the right-hand column of the following table, which shows the individual benefits of Eleanor. Hint: You are not required to consider the benefit of Kyoko. Eleanor Contribute $640,-- Doesn't contribute $720,-- Contribute Kyoko Doesn't contribute $ $ If Kyoko decides to contribute to the public park, Eleanor would maximize her benefit by choosing other hand, if Kyoko decides not to contribute to the public park, Eleanor would maximize her benefit by choosing park. These results illustrate to the public park. On the to the public
Transcribed Image Text:Of the four cells of the table, which gives the greatest combined benefits to Eleanor and Kyoko? O When Eleanor contributes to the public park and Kyoko doesn't, or vice versa When neither Eleanor nor Kyoko contributes to the public park O When both Eleanor and Kyoko contribute to the public park Now, consider the incentive facing Eleanor individually. The following table looks similar to the previous one, but this time, it is partially completed with the individual benefit data for Eleanor. As shown previously, if both Eleanor and Kyoko contribute to a public good, Eleanor receives a benefit of $640. On the other hand, if Kyoko contributes to the public park and Eleanor does not, Eleanor receives a benefit of $720. Complete the right-hand column of the following table, which shows the individual benefits of Eleanor. Hint: You are not required to consider the benefit of Kyoko. Eleanor Contribute $640,-- Doesn't contribute $720,-- Contribute Kyoko Doesn't contribute $ $ If Kyoko decides to contribute to the public park, Eleanor would maximize her benefit by choosing other hand, if Kyoko decides not to contribute to the public park, Eleanor would maximize her benefit by choosing park. These results illustrate to the public park. On the to the public
3. Voluntary contributions toward a public good Eleanor and Kyoko are considering contributing toward the creation of a public park. Each can choose whether to contribute $400 to the public park or to keep that $400 for a cell phone. Since a public park is a public good, both Eleanor and Kyoko 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 Eleanor and Kyoko choose to contribute, then a total of $800 would be contributed to the public park. So, Eleanor and Kyoko would each receive $640 of benefit from the public park, and their combined benefit would be $1,280. This is shown in the upper left cell of the first table. Since a cell phone is a private good, if Eleanor chooses to spend $400 on a cell phone, Eleanor would get $400 of benefit from the cell phone and Kyoko wouldn't receive any benefit from Eleanor's choice. If Eleanor still spends $400 on a cell phone and Kyoko chooses to contribute $400 to the public park, Eleanor would still receive the $320 of benefit from Kyoko's generosity. In other words, if Eleanor decides to keep the $400 for a cell phone and Kyoko decides to contribute the $400 to the public project, then Eleanor would receive a total benefit of $400 + $320 = $720, Kyoko would receive a total benefit of $320, and their combined benefit would be $1,040. This is shown in the lower left cell of the first table. Complete the following table, which shows the combined benefits of Eleanor and Kyoko as previously described. Eleanor Kyoko Contributes Doesn't contribute $1,280 $ Doesn't contribute $1,040 $ Contributes
Transcribed Image Text:3. Voluntary contributions toward a public good Eleanor and Kyoko are considering contributing toward the creation of a public park. Each can choose whether to contribute $400 to the public park or to keep that $400 for a cell phone. Since a public park is a public good, both Eleanor and Kyoko 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 Eleanor and Kyoko choose to contribute, then a total of $800 would be contributed to the public park. So, Eleanor and Kyoko would each receive $640 of benefit from the public park, and their combined benefit would be $1,280. This is shown in the upper left cell of the first table. Since a cell phone is a private good, if Eleanor chooses to spend $400 on a cell phone, Eleanor would get $400 of benefit from the cell phone and Kyoko wouldn't receive any benefit from Eleanor's choice. If Eleanor still spends $400 on a cell phone and Kyoko chooses to contribute $400 to the public park, Eleanor would still receive the $320 of benefit from Kyoko's generosity. In other words, if Eleanor decides to keep the $400 for a cell phone and Kyoko decides to contribute the $400 to the public project, then Eleanor would receive a total benefit of $400 + $320 = $720, Kyoko would receive a total benefit of $320, and their combined benefit would be $1,040. This is shown in the lower left cell of the first table. Complete the following table, which shows the combined benefits of Eleanor and Kyoko as previously described. Eleanor Kyoko Contributes Doesn't contribute $1,280 $ Doesn't contribute $1,040 $ Contributes
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