Question 4) The bar graph below shows data from Smallville (Population 1000) where there is heterogeneity in the maximum a citizen is willing to pay (WTP) for a facemask. (WTP of - $50 indicates that an individual will wear a mask if they have been paid at least $50 to wear a mask.) WTP is the dollar value of the marginal individual utility to a person of receiving the good. Individuals who wear masks derive utility from the warm glow of knowing they are protecting others minus the temporary discomfort, in-group social signaling, and effect on personal appearance. Data on personal protective benefit is still emerging so assume it is zero. So assume that WTP (Face Mask)=U:(Face Mask). Joe comes from the group on the far left of the graph. Joe is fully informed that face masks will lower the infection rate for the town, but he is young and super healthy and extremely selfish. Mary comes from the group on the far right. She has diabetes and a high degree of concern for other people's health. Mary and Joe are at a Zoom town hall meeting to deliberate on how to use tax dollars to combat the infectious disease by promoting the use of masks. Proportion of Population by Willingness to Pay for Face Mask SON ON 40% Proportion Wagto Pay 20N 10 ON 520.00 Maximum Willingnes to pay for Face Mask They start to use the Zoom Chat box to discuss the town's social choice problem. They both got A's in their Health Economics class last year and they are both gocks. They decide to start chatting using as many economics words as they can. Both of them want the town's decision to spend tax money on public health to maximize their own personal utility function and they realize that political persuasion and log-rolling might help them achieve their goal. However, both are rational perfectly informed, and they have stable preferences Since Joe and Mary are both perfectly informed, ideological debate is printless. Desh.M.SE When B)Fill in the rest of a possible online conversation between Mary and Joe that could lead to a Pareto optimal outcome if it were scaled up to the entire town. Help Joe and Mary think about payments among the three groups in Smallville that will leave everyone equally well off. Assume it costs $0 to produce a mask so all that is necessary is incentive payments. From Mary to Joe: I just calculated our town's social welfare from increasing mask use from 0 to 1000 as W if everyone in Smallville wears a facemask. The per person marginal social benefit from universal mask wearing is S" lower than my personal WTP or so. From Joe to Mary: From Mary to Joe: From Joe to Mary: From Mary to Jon: From Joe to Mary: From Mary to Jon: From Joe to Mary