PS10_Essay

PS10_Essay - . Carrying the pails of water down requires...

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- - ECON1001: Principles of Microeconomics (Non-major) Fall 2007 Problem set #10 (Question & Answer Sheet) Please drop off to Moyin’s mailbox at 9/F, KKL Building , according to your sub-classes Note : Moyin has 3 mailboxes! Please don’t submit your assignments to lecturers! *Please hand in a single sheet, with both sides printed. LATE ASSIGNMENTS WILL NOT BE GRADED. Name: Student ID: (Please print) Subclass: ECON1001 C / D / E / F / G / H (circle one) Lecturer: Dr S. Démurger / Dr Y.K. Fan / Dr M. Lo (circle one) 1. Multiple Choice Questions Due Date: 5pm, 23 Nov (Fri) Please hand in your answers in the WebCT. Other submission methods NOT allowed! You can download a reference copy from the tutorial website for better
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- - Question: Jill and Jack both have two pails that can be used to carry water down from a hill. Each makes only one trip down the hill, and each pail of water can be sold for $5
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Unformatted text preview: . Carrying the pails of water down requires considerable effort. Both Jill and Jack would be willing to pay $2 each to avoid carrying one bucket down the hill, and an additional $3 to avoid carrying a second bucket down the hill. 1. (assuming that Jill and Jack make independent decisions in this question.) Given market prices, how many pails of water will each child fetch from the top of t h e h i l l ? Ans: _Jill:___________; Jack_ _ 2. Jill and Jack’s parents are worried that the two children don’t cooperate enough with one another. Suppose they make Jill and Jack share equally their revenues from selling the water. Given that both are self-interested, construct the payoff matrix for the decisions Jill and Jack face regarding the number of pails of water each should carry. (Label your diagram well, no need to explain.) On the same diagram, circle the equilibrium outcome in red . Jill- End - Jack...
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PS10_Essay - . Carrying the pails of water down requires...

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