Due Today at 11 PM EST 8. Problems and Applications Q8 Five roommates are planni

Question

Due Today at 11 PM EST 8. Problems and Applications Q8 Five roommates are planning to spend the weekend in their dorm room watching movies, and they are debating how many movies to watch. Here is their willingness to pay Willingness to Pay (Dollars) Andrew Darnell Jacques Musashi Sean First film Second film Third film Fourth film Fifth film 14 12 10 6 2 10 2 2 6 0 2 0 0 Buying a DVD costs $15, which the roommates split equally, so each pays $3 per movie. The efficient number of movies to watch (that is, the number that maximizes total surplus) is movies Complete the following table by indicating the preferred number of movies from the standpoint of each roommate.

Explanation / Answer

1> Efficient number of movies is 3.

Reason

For 3rd movie, marginal benefit=$18>$15

2> Andrew 4

Darnell 3

Jacq 2

Mush 1

Sean 0

Reason

It follows that marginal cost is equal to the price $3.

3> median is 2 movies. The guy is Jacques

4> Andrew and Darell vote for efficient whereas Jacques, Sean, Mush for median one.

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