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(Solved): A village has six residents, each of whom has accumulated savings of $100. Each villager can use th ...
A village has six residents, each of whom has accumulated savings of $100. Each villager can use this money either to buy a government bond that pays 15 percent interest per year or to buy a year-old llama, send it onto the commons to graze, and sell it after 1 year. The price the villager gets for the 2 -year-old liama depends on the quality of the fleece it grows while grazing on the commons, That in turn depends on the animal's access to grazing, which depends on the number of llamas sent to the Fommons, as shown in the following table: The villagers make their investment decisions one after another, and their decisions are public. a. If each villager decides individually how to invest, how many llamas will be sent onto the commons, and what will be the resulting village income? Number of llamas: Instructions: Enter your response as a whole number. Vulioge income: $