Can you answer part a please? 2. Two people, A and B, are deciding whether to put effort into producing apublic good or not. Each person, i, can either choose no effort (s; = 0) oryes effort (s; = 1). The total public good produced is G = SA + SB. Thecost of doing no effort is 0. The cost of doing yes effort is 1.5. The payoffto a player is the total public goods provided (G) minus her personal costs.(a) Given a choice by player B, SB, write down player A's utility fromchoosing no effortGiven a choice by player B, SB, write down player A's utility fromchoosing yes effort.(c) Comparing these two utilities, write down player A's best response.Noticing that player B's problem is identical to player A's, what isthe unique Nash equilibrium of this game?

The objective of the question is to determine the utility of player A when she chooses to put in…

Answered: 2. Two people, A and B, are deciding…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4. Two people, A and B, are deciding whether to put effort into producing a public good or not. Each person, i, can either choose no effort (s; = 0) or yes effort (s; = 0). The total public good produced is G = max{SA, SB}. The cost of doing no effort is 0. The cost of doing yes effort is 1.5. The payoff to a player is the total public goods provided (G) minus her personal costs. i. Given a choice by player B, SB, write down player A's utility from choosing no effort. Given a choice by player B, SÅ, write down player A?s utility from choosing yes effort. Comparing these two utilities, write down player A's best response. Noticing that player B's problem is identical to player A's, what is the unique Nash equilibrium of this game? In four sentences or less, explain why the Nash equilibrium represents a social dilemma and how this relates to the idea of positive externalities.
Consider a public good, G, that is shared by Consumer A and B. Each can purchase G at the price of $20 per unit. A's marginal benefit from this public good is given by MBA-50-G. If A thinks B is getting 10 units of G, then A's optimal contribution into G will be units. On the other hand, if A thinks B is getting 20 units of G, then A's optimal contribution into G will be units. Blank # 1 Blank # 2 A/ N
Please solve part d,e and f!!! Three roommates, Jim, Saleem, and Ritesh, are thinking about buying a new speaker system for their apartment. The speaker system would be a public good if they buy them, and the total cost would be $300 which would be shared equally among the three. Jim values it at $80, Saleem values it at $140, and Ritesh values it at $70. If the speakers are purchased each person gets a payoff equal to their net valuation (valuation minus cost share); if they are not purchased each gets zero payoff. a)Is it socially efficient that they buy the speaker system? With reference to the definition of a public good, why or why not? The roommates decide that they will write down their net valuations, and if these reports sum to more than zero, they will buy the TV (sharing the cost equally), or else they will not. b) If all were to report their true valuations, what payoff would each agent earn? c) Show that if Jim and Ritesh submit their true net valuation, then Saleem does…
please answer all including ones that may have already been selected. Eric and Kenji are considering contributing toward the creation of a public park. Each can choose whether to contribute $300 to the public park or to keep that $300 for a cell phone. Since a public park is a public good, both Eric and Kenji will benefit from any contributions made by the other person. Specifically, every dollar that either one of them contributes will bring each of them $0.90 of benefit. For example, if both Eric and Kenji choose to contribute, then a total of $600 would be contributed to the public park. So, Eric and Kenji would each receive $540 of benefit from the public park, and their combined benefit would be $1,080. This is shown in the upper left cell of the first table. Since a cell phone is a private good, if Eric chooses to spend $300 on a cell phone, Eric would get $300 of benefit from the cell phone and Kenji wouldn't receive any benefit from Eric's choice. If Eric still spends $300…
tidterm Exam #2 Alternative Back to Assignment Attempts 3. Keep the Highest 3/4 S. Externalities - Definition and examples An externality arises when a firm or person engages in an activity that affects the wellbeing of a third party, yet neither pays nor receives any compensation for that effect. If the Impact on the third party is adverse, it is called a extemality. The following graph shows the demand and supply curves for a good with this type of externality. The dashed drop lines on the graph reflect the market equilibrium price and quantity for this good. Adjust one or both of the curves to reflect the presence of the externality. af the social cost of producing the good is not egual to the private cost, then you should drag the supply curve to reflecet the social costs of producing the good; simiarly, f the social value of producing the pood is not equal to the private value, then you should drag the demand curve to reflect the social value of consuming the good. Supply Demand…
1. An externality exists when agent A’s utility or production function depends on real variables chosen by another agent B, without an offer of compensation or other attention given to the effect of A’s well-being. True or False 2. The "invisible hand" of the market leads to the efficient allocation of goods and services, even in the presence of externalities. True or False 3. If there is a negative production externality, the market price of the good will be higher than the socially-optimal price. True or False
1. If you were to graph a measure of pollution on one axis and a level of economic activity (such as the real gross domestic product per person) on the other, what type of relationship do you think you would find? How would you explain this relationship? 2. Think of an externality that arises in a college dorm. What market can you think of that would (or could) eliminate any inefficiencies from that externality?
Externalities and Public Goods – End of Chapter Problem In 2018, a wind farm developer was ordered by the Iowa state appeals court to dismantle its newly constructed wind turbines after adjacent residents filed a lawsuit complaining that they never consented to the loud noise and visual obstructions of the turbines. How could the wind farm developer have utilized insights from the Coase Theorem to avoid its legal troubles and ultimately wasting millions of dollars on wind turbines it never got to operate? Select all situations that would apply. The developer could have asked the government to set a quota on electricity generation for the wind farm so there would be down time from the noise. The developer could have petitioned the local and state government to fund the wind farm. The developer could have invested in improved infrastructure for power generation to lower residents' electricity costs as well as to promote the use of wind farms. The developer could have paid people living…
Two firms are ordered by the federal government to reduce their pollution levels. Firm A’s marginal costs associated with pollution reduction are MC = 150 + 3Q. Firm B’s marginal costs associated with pollution reduction is MC = 9Q. The marginal benefit of pollution reduction is MB = 250-4Q. A.What is the socially optimal level of each firm’s pollution reduction? B. Compare the social efficiency of three possible outcomes: Require all firms to reduce pollution by the same amount (half of the total calculated in part a); Charge a common tax per unit of pollution; Require all firms to reduce pollution by the same amount, but allow pollution permits to be bought and sold
Each of n people simultaneously chooses whether or not to contribute 'a fixed amount toward the provision of a public good. The good is provided if and only if at least k people contribute, where 2 < k < n; if it is not provided, contributions are not refunded. Each person ranks outcomes from best to worst as follows: » (i) any outcome in which the good is provided and she does not contribute. (ii) any outcome in which the good is provided and she contributes. (iii) any outcome in which the good is not provided and she does not contribute. » (iv) any outcome in which the good is not provided and she contributes. If we treat above situation as a strategic game, find its Nash equilibria, to be specific, is there a Nash equilibrium in which more than k people contribute? One in which k people contribute? One in which fewer than k people contribute? Explain your reasoning.
2. Refer to Graph 10-1. Assume the externality is not internalised. What is the loss to society from the last unit of the good produced by the market? A. P3-P2 B. P2-P1 C. P3-P1 D. ZeroGraph 10-1 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Consider the market illustrated in the figure to the right. Supply curve S₁ represents the private cost of production and demand curve D₁ represents the private benefit from consumption. Suppose production of this good creates a negative externality. Show how the externality affects the market. 1.) Use the line drawing tool to draw either a new supply (S₂) or demand (D₂) curve incorporating the negative externality in production. Properly label this line. 2.) Use the point drawing tool to indicate the market equilibrium price and quantity. Label this point 'Market equilibrium'. 3.) Use the point drawing tool to indicate the efficient equilibrium price and quantity. Label this point 'Efficient equilibrium'. Carefully follow the instructions above, and only draw the required objects. Price Quantity S₁ D₁

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