3. Voluntary contributions toward a public good Dina and Juanita 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 pool table. Since a building mural is a public good, both Dina and Juanita 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 Dina and Juanita choose to contribute, then a total of $800 would be contributed to the building mural. So, Dina and Juanita would each receive $640 of benefit from the building mural, and their combined benefit would be $1,280. This is shown in the upper left cell of the first table. Since a pool table is a private good, if Dina chooses to spend $400 on a pool table, Dina would get $400 of benefit from the pool table and Juanita wouldn't receive any benefit from Dina's choice. If Dina still spends $400 on a pool table and Juanita chooses to contribute $400 to the building mural, Dina would still receive the $320 of benefit from Juanita's generosity. In other words, if Dina decides to keep the $400 for a pool table and Juanita decides to contribute the $400 to the public project, then Dina would receive a total benefit of $400+$320=$720, Juanita 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 Dina and Juanita as previously described. Of the four cells of the table, which gives the greatest combined benefits to Dina and Juanita? When both Dina and Juanita contribute to the building mural When neither Dina nor Juanita contributes to the building mural When Dina contributes to the building mural and Juanita doesn't, or vice versa Now, consider the incentive facing Dina individually. The following table looks similar to the previous one, but this time, it is partially completed with the individual benefit data for Dina. As shown previously, if both Dina and Juanita contribute to a public good, Dina receives a benefit of $640. On the other hand, if Juanita contributes to the building mural and Dina does not, Dina receives a benefit of $720. Complete the right-hand column of the following table, which shows the individual benefits of Dina. Hint: You are not required to consider the benefit of Juanita. If Juanita decides to contribute to the building mural, Dina would maximize her benefit by choosing to the building mural. On the other hand, if Juanita decides not to contribute to the building mural, Dina would maximize her benefit by choosing to the building mural. These results illustrate oosing to ze her not to contribute to contribute uld maximize her ber ding mural, Dina wou.

1. 3. Voluntary contributions toward a public good Dina and Juanita 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 pool table. Since a building mural is a public good, both
Dina and Juanita 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 Dina and Juanita choose to contribute, then a total of $800 would be contributed
to the building mural. So, Dina and Juanita would each receive $640 of benefit from the building
mural, and their combined benefit would be $1,280. This is shown in the upper left cell of the
first table. Since a pool table is a private good, if Dina chooses to spend $400 on a pool table,
Dina would get $400 of benefit from the pool table and Juanita wouldn't receive any benefit from
Dina's choice. If Dina still spends $400 on a pool table and Juanita chooses to contribute $400 to
the building mural, Dina would still receive the $320 of benefit from Juanita's generosity. In
other words, if Dina decides to keep the $400 for a pool table and Juanita decides to contribute
the $400 to the public project, then Dina would receive a total benefit of $400+$320=$720,
Juanita 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 Dina and Juanita as previously described. Of the four cells of the table,
which gives the greatest combined benefits to Dina and Juanita? When both Dina and Juanita
contribute to the building mural When neither Dina nor Juanita contributes to the building mural
When Dina contributes to the building mural and Juanita doesn't, or vice versa
Now, consider the incentive facing Dina individually. The following table looks similar to the
previous one, but this time, it is partially completed with the individual benefit data for Dina. As
shown previously, if both Dina and Juanita contribute to a public good, Dina receives a benefit of
$640. On the other hand, if Juanita contributes to the building mural and Dina does not, Dina
receives a benefit of $720. Complete the right-hand column of the following table, which shows
the individual benefits of Dina. Hint: You are not required to consider the benefit of Juanita. If
Juanita decides to contribute to the building mural, Dina would maximize her benefit by
choosing to the building mural. On the other hand, if Juanita decides not to contribute to the
building mural, Dina would maximize her benefit by choosing to the building mural. These
results illustrate
oosing to ze her not to contribute to contribute
uld maximize her ber ding mural, Dina wou