C 2 ng.cengage.com/staticb/ui/evo/index.html? deploymentld=56736619720212108401873280819&elSBN=9781337096577&id=1990099008&snapshotld=38. Nicholas W.. A ALEKS - Nicholas W. ALEKS- ONLINE Q. ^ C4ELink: Log in to t. CENGAGE | MINDTAP Homework (Ch 11) 3. Voluntary contributions toward a public good Crystal and Hilary are considering contributing toward the creation of a building mural. Each can choose whether to contribute $400 to the building mural or to keep that $400 for a new suit. Since a building mural is a public good, both Crystal and Hilary 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 Crystal and Hilary choose to contribute, then a total of $800 would be contributed to the building mural. So, Crystal and Hilary would each receive $640 of benefit from the building mural, and their combined benefit would iye $1,280. This is shown in the upper left cell of the first table. Since a new suit is a private good, if Crystal chooses to spend $400 on a new suit, Crystal would get $400 of benefit from the new suit and Hilary wouldn't receive any benefit from Crystal's choice. If Crystal still spends $400 on a new suit and Hilary chooses to contribute $400 to the building mural, Crystal would still receive the $320 of benefit from Hilary's generosity. In other words, if Crystal decides to keep the $400 for a new suit and Hilary decides to contribute the $400 to the public project, then Crystal would receive a total benefit of $400 + $320 = $720, Hilary 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 Crystal and Hilary as previously described. 2 Hilary Contributes Doesn't contribute 5 Ap hipC - ng.cengage.com/staticb/ui/evo/index.html?deploymentld=56736619720212108401873280819&elSBN=9781337096577&id=1990099008&snapshotld=38... * A ALEKS - Nicholas W. A ALEKS-Nicholas W. ALEKS-ONLINE Q. C4ELink: Log in to t. All Book CENGAGE | MINDTAP Q Search this course Homework (Ch 11) X Complete the following table, which shows the combined benefits of Crystal and Hilary as previously described. Hilary Contributes Doesn't contribute E Contributes $1,280 Crystal Doesn't contribute $1,040 L Of the four cells of the table, which gives the greatest combined benefits to Crystal and Hilary? EI When Crystal contributes to the building mural and Hilary doesn't, or vice versa When neither Crystal nor Hilary contributes to the building mural When both Crystal and Hilary contribute to the building mural bongo Now, consider the incentive facing Crystal individually. The following table looks similar to the previous one, but this time, it is partially completed with the individual benefit data for Crystal. As shown previously, if both Crystal and Hilary contribute to a public good, Crystal receives a benefit of $640. On the other hand, if Hilary contributes to the building mural and Crystal does not, Crystal receives a benefit of $720. At 2 V MODO Apr 1 4:26 0 AD esc C backspace 10old=38... * Nicholas W.. A ALEKS - Nicholas W.. ALEKS- ONLLINE Q. ro C4ELink: Log in to t. CENGAGE | MINDTAP Search this course Homework (Ch 11) O X Complete the right-hand column of the following table, which shows the Individual benefits of Crystal. Hint: You are not required to consider the benefit of Hilary. Hilary Contribute Doesn't contribute Contribute $640, Crystal Doesn't contribute $720, - If Hilary decides to contribute to the building mural, Crystal would maximize her benefit by choosing to the building mural. On the other hand, if Hilary decides not to contribute to the building mural, Crystal would maximize her to to contribute the building mural. not to contribute These results illustrate Grade It Now Save & Continue Continue without saving OFMOO 1 3 3 Apr 1 4:26CENGAGE | MINDTAP Q Search Homework (Ch 11) Complete the right-hand column of the following table, which shows the Individual benefits of Crystal. Hint: You are not required to consider the benefit of Hilary. Hilary Contribute Doesn't contribute EI Contribute $640, - $ Crystal Doesn't contri the free-rider problem the Tragedy of the Commons If Hilary decides to con ould maximize her benefit by choosing to the building mural. On the other hand, if Hilar why markets are efficient ng mural, Crystal would maximize her benefit by choosing to the building mural. the creation of a positive externality These results illustrate Grade It Now Save & Continue ? Continue without saving OBMODO 5 Apr T hp C 110 O esc