Question

3. Problems 11-5 Four roommates are planning to spend the weekend in their dorm room watching old movies, and they are debating how many to watch. Here is their willingness to pay for each film: Willingness to Pay (Dollars) Andrew Darnell Jacques Musashi 6 First film Second film Third film Fourth film Fifth film Within the dorm room, the showing of a movie a public good. If it costs $8 to rent a movie, the roommates should rent 3 movies in order to maximize the total surplus. Suppose the roommates choose to rent the optimal number of movies you just indicated and then split the cost of renting equally. This means that each roommate will pay $ . Complete the following table with each roommate's total willingness to pay for this many movies and the survus each person obtains from watching the movies Total Willingness to Pay nar Consumer Surplus nares

Answer 1

he 91 is at a public good (sts more common good) 3 movies (4th movie pay = 4+2=6 $6 2$8) Ralpogos Total pay = 883 = 24$. Each pay - 24 = 164 Willingness est 7+6+ s =18 18-6= 12 5+4+3= 12 12-62 6 3+2+1 = 6 6-6=0 2+1to =3 3-6=-3. <Aь. . increase the value True Because Andrew has max es, will have to pay maximum. understates) do not have an incentive to hide. so che So he