4B. What should the bargain be like?

who wear masks derive utility trom the warm glow of knowing they are protecting others minus the temporary discomfort, ingroup social signaling. and effect on personal appearance. Data on personal protective benefit is still emerging so assume it is zero. So assume that WTPi (Face Mask) =U:{Face Mask). A) Using the formula from class and assuming egalitarian social weights calculate the marginal social welfare W of wearing a mask. Joe comes from the group on the far left of the graph. Joe is fully informed that face masks will lower the infection rate for the townr but he is young and super healthy and extremely selsh. Mary comes from the group on the far right. She has diabetes and a high degree of concern for other people's health. Mary and Joe are at a Zoom town hall meeting to deliberate on how to use tax dollars to combat the infectious disease by promoting the use of masks. Proportion of Population by Willingness to Pay for Facelvlask 50'! 40% I was -5;Ii1oo 51B 550 Proportion Willingtu Pay 3 is\" s Maxilrlulrlwilliitgneslo Pay for a Fate Mask They start to use the Zoom Chat box to discuss the town's social choice problem. They both got A's in their Health Economics class last year and they are both geeks. They decide to start chatting using as many economics words as they can. Both of them want the town's decision to spend tax money _| on public health to maximize their own personal utility function and they realize that political persuasion and log1'oliing might help them achieve their goal. However.both are rational, perfectly informed. and they have stable preferences. Since Joe and Mary are both perfectly informed. ideological debate is pointless. De gusribus non est o'isgutsndom. B)Fiil in the rest of a possible oniine conversation between Mary and Joe that could lead to a Pareto optimal outcome if it were scaled up to the entire town. Help Joe and Mary think about payments among the three groups in Smallville that will leave everyone equally well off. Assume it costs $0 to produce a mask so all that is necessary is incentive payments. From Flory to Joe: Ijust calculated our town's social welfare from increasing mask use from 0 to 1000 as W=\" " if everyone in Smallville wears a facemask. The per person marginal social benefit from universal mask wearing is 3\" " lower than my personal WTP of $50. From Joe to Mary: From Mary to Joe: From Joe to Mary: From Mary to Joe: From Joe to Mary: From Flory to Joe: From Joe to Mary