that $300 for a weekend getaway. uilding mural is a public good, both Nick and Tim will benefit from any contributions made by the other person. Specifically, every dollar that e of them contributes will bring each of them $0.90 of benefit. For example, if both Nick and Tim choose to contribute, then a total of $600 contributed to the building mural. So, Nick and Tim would each receive $540 of benefit from the building mural, and their combined benefit $1,080. This is shown in the upper left cell of the first table. eekend getaway is a private good, if Nick chooses to spend $300 on a weekend getaway, Nick would get $300 of benefit from the weekend and Tim wouldn't receive any benefit from Nick's choice. If Nick still spends $300 on a weekend getaway and Tim chooses to contribute $300 Iding mural, Nick would still receive the $270 of benefit from Tim's generosity. In other words, if Nick decides to keep the $300 for a getaway and Tim decides to contribute the $300 to the public project, then Nick would receive a total benefit of $300 + $270 = $570, Tim eive a total benefit of $270, and their combined benefit would be $840. This is shown in the lower left cell of the first table. %3D the following table, which shows the combined benefits of Nick and Tim as previously described. Tim
that $300 for a weekend getaway. uilding mural is a public good, both Nick and Tim will benefit from any contributions made by the other person. Specifically, every dollar that e of them contributes will bring each of them $0.90 of benefit. For example, if both Nick and Tim choose to contribute, then a total of $600 contributed to the building mural. So, Nick and Tim would each receive $540 of benefit from the building mural, and their combined benefit $1,080. This is shown in the upper left cell of the first table. eekend getaway is a private good, if Nick chooses to spend $300 on a weekend getaway, Nick would get $300 of benefit from the weekend and Tim wouldn't receive any benefit from Nick's choice. If Nick still spends $300 on a weekend getaway and Tim chooses to contribute $300 Iding mural, Nick would still receive the $270 of benefit from Tim's generosity. In other words, if Nick decides to keep the $300 for a getaway and Tim decides to contribute the $300 to the public project, then Nick would receive a total benefit of $300 + $270 = $570, Tim eive a total benefit of $270, and their combined benefit would be $840. This is shown in the lower left cell of the first table. %3D the following table, which shows the combined benefits of Nick and Tim as previously described. Tim
Chapter2: Economic Tools And Economic Systems
Section: Chapter Questions
Problem 3.7P
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