CENGAGE | MINDTAP Q Search this co omework(Ch 11) when neither Amy nor Deboran contributes to the water fountain Now, consider the incentive facing Amy individually. The following table looks similar to the previous one, but this time, it is partially completed with the individual benefit data for Amy. As shown previously, if both Amy and Deborah contribute to a public good, Amy receives a benefit of $420. On the other hand, if Deborah contributes to the water fountain and Amy does not, Amy receives a benefit of $510. Complete the right-hand column of the following table, which shows the individual benefits of Amy. Hint: You are not required to consider the benefit of Deborah. Deborah Contribute Doesn't contribute Contribute $420, -- $ Amy Doesn't contribute $510, -- $ If Deborah decides to contribute to the water fountain, Amy would maximize her benefit by choosing to the water fountain. On the other hand, if Deborah decides not to contribute to the water fountain, Amy would maximize her benefit by choosing to the water fountain. These results illustrate Grade It Now Save & Continue Continue without savingHomework(Ch 11) r Back to Assignment - Attempts m Keep the Highest / 5 3. Voluntary contributions toward a public good Amy and Deborah are considering contributing toward the creation If a water fountain. Each can choose whether to contribute $300 to the water fountain or to keep that $300 for a new suit. 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 either one of them contributes will bring each of them $0.70 of benefit. For example, if both Amy and Deborah choose to contribute, then a total of $600 would be contributed to the water fountain. So, Amy and Deborah would each receive $420 of benefit from the water fountain, and their combined benet would be $840. This is shown in the upper left cell of the rst table. Since a new suit is a private good, if Amy chooses to spend $300 on a new suit, Amy would get $300 of benefit from the new suit and Deborah wouldn't receive any benefit from Amy's choice. If Amy still spends $300 on a new suit and Deborah chooses to contribute $300 to the water fountain, Amy would still receive the $210 of benefit from Deborah's generosity. In other words, if Amy decides to keep the $300 for a new suit and Deborah decides to contribute the $300 to the public project, then Amy would receive a total benefit of $300 + $210 = $510, Deborah would receive a total benefit of $210, and their combined benefit would be $720. This is shown in the lower left cell of the first table. Complete the following table, which shows the combined benets of Amy and Deborah as previously described. Deborah ' Contributes Doesn't contribute Q Search this cour Homework(Ch 11) Complete the following table, which shows the combined benefits of Amy and Deborah as previously described. Deborah Contributes Doesn't contribute Contributes $840 $ Amy Doesn't contribute $720 $ Of the four cells of the table, which gives the greatest combined benefits to Amy and Deborah? When both Amy and Deborah contribute to the water fountain When Amy contributes to the water fountain and Deborah doesn't, or vice versa When neither Amy nor Deborah contributes to the water fountain Now, consider the incentive facing Amy individually. The following table looks similar to the previous one, but this time, it is partially completed with the individual benefit data for Amy. As shown previously, if both Amy and Deborah contribute to a public good, Amy receives a benefit of $420. On the other hand, if Deborah contributes to the water fountain and Amy does not, Amy receives a benefit of $510. Complete the right-hand column of the following table, which shows the individual benefits of Amy. Hint: You are not required to consider the benefit of Deborah