Business, 27.06.2020 18:01 ejones123

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)

Kevin Rajiv Yakov Charles
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 ( IS OR IS NOT ) a public good.
If it costs $8 to rent a movie, the roommates should rentmovies 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.
Total Willingness to Pay Consumer Surplus
Roommate (Dollars) (Dollars)
Kevin
Rajiv
Yakov
Charles
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 roommates has an incentive to ( UNDERSTATE OR OVERSTATE ) 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 Kevin is asked his willingness to pay, he will have an incentive to tell the truth.
a. True
b. False
This examples teaches you that the optimal provision of a public good will occur if individuals ( DO NOT HAVE OR DO HAVE ) an incentive to hide their valuation of the good.

Answers: 3

Show answers

Another question on Business

Business, 22.06.2019 07:30

Which of the following best describes why you need to establish goals for your program?

Answers: 3

Answer

Business, 22.06.2019 11:50

The following are the current month's balances for abc financial services, inc. before preparing the trial balance. accounts payable $ 10,000 revenue 6,000 cash 3,000 expenses 17,500 furniture 10,000 accounts receivable 14,000 common stock ? notes payable 6,500 what amount should be shown for common stock on the trial balance? a. $48.000b. $12.500c. $27.000d. $28.000

Answers: 3

Answer

Business, 22.06.2019 17:50

The management of a supermarket wants to adopt a new promotional policy of giving a free gift to every customer who spends > a certain amount per visit at this supermarket. the expectation of the management is that after this promotional policy is advertised, the expenditures for all customers at this supermarket will be normally distributed with a mean of $95 and a standard deviation of $20. if the management wants to give free gifts to at most 10% of the customers, what should the amount be above which a customer would receive a free gift?

Answers: 1

Answer

Business, 22.06.2019 19:00

The market demand curve for a popular teen magazine is given by q = 80 - 10p where p is the magazine price in dollars per issue and q is the weekly magazine circulation in units of 10,000. if the circulation is 400,000 per week at the current price, what is the consumer surplus for a teen reader with maximum willingness to pay of $3 per issue?

Answers: 1

Answer

You know the right answer?

Four roommates are planning to spend the weekend in their dorm room watching old movies, and they ar...

Questions