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Back to Assignment Attempts 1 Keep the Highest 1 /5 3. Voluntary contributions toward a public good Amy and Deborah are considering contributing toward the

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Back to Assignment Attempts 1 Keep the Highest 1 /5 3. Voluntary contributions toward a public good Amy and Deborah are considering contributing toward the creation of a water fountain. Each can choose whether to contribute $400 to the water fountain or to keep that $400 for a cell phone. Since a water fountain is a public good, both Amy and Deborah will benefit from any contributions made by the other person. Specifically, every dollar that ether one of them contributes will bring each of them $0.80 of benefit. For example, if both Amy and Deborah choose to contribute, then a total of $800 would be contributed to the water fountain. So, Amy and Deborah would each receive $640 of benefit from the water fountain, and their combined benefit would be $1,250. This is shown in the upper left cell of the first table. Since a cell phone is a private good, If Amy chooses to spend $400 on a cell phone, Amy would get $400 of benefit from the cell phone and Deborah wouldn't receive any benefit from Amy's choice. If Amy still spends $400 on a cell phone and Deborah chooses to contribute $400 to the water fountain, Amy would still receive the $320 of benefit from Deborah's generosity. In other words, if Amy decides to keep the $400 for a cell phone and Deborah decides to contribute the $400 to the public project, then Arry would receive a total benefit of $400 + $320 = $720, Deborah 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 Amy and Deborah as previously described. Deborah Contributes $1,280 Amy $1,040 Of the four cells of the table, which gives the greatest combined benefits to Amy and Deborah

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