ECO 112 - Public Goods Monte Carlo Questions person B Co ntribute Do A pays SO , not gain SO $0, B SO, receives SO, not gain SO A pays receives $21 , net gain B pays SO, receives $21. not gain $21 A So, $21 , not gain S21 B $28, receives $21, not gain S.7 A S2B, receives $42 , net gain S14 pays S28, receives S42, not gain $14 . The matrix above describes a problem in which individuals are trying to fund a public good, like a lighthouse, and must decide whether to contribute to its funding or not. If no one contributes, the good is not built. Find the Nash Equilibrium of the game above. Explain your answer. 2. 3. 4. 5. 6. In the diagram above, is there a pc*itive or negative externality? How do you know? What is the market equilibrium? Calculate consumer and producer surplus at the market equilibrium. What is the socially efficient price and quantity? Calculate consumer and producfr surplus at the socially optimal pricf and quantity. What advice would an ecxonomist give in this situation? 1 will reroll.