5. Problems and Applications Q5 Four roommates are planning to spend the weekend in their dorm…

5. Problems and Applications Q5
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

First film
10
9
6
3

Second film
9
7
4
2

Third film
8
5
2
1

Fourth film
7
3
0
0

Fifth film
6
1
0
0

Within the dorm room, the showing of a movie a
public good.
If it costs $8 to rent a movie, the roommates should rent
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 surplus each person
obtains from watching the movies.

Roommate

Total Willingness to Pay

Consumer Surplus

(Dollars)

(Dollars)

Andrew

Darnell

Jacques

Musashi

In order to split the cost in a way that ensures that everyone
benefits, the cost could be divided up based on the benefits each
roommate receives.
The practical problem with this solution is that each roommate
has an incentive to the value of the movies to him.
Suppose they agree in advance to choose the efficient number and
to split the cost of the movies equally.
True or False: When Andrew is asked his willingness to pay, he
will have an incentive to understate the value of the movies to
him.
True
False
This examples teaches you that the optimal provision of a public
good will occur if individuals an incentive
to hide their valuation of the good.

Custom Paper Help
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

Essays

Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

Admissions

Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

Reviews

Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

Reviews

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.