Four friends decide to get together to watch classic Hong Kong action films, and are debating how many to rent. Here is their willingness to pay for each film:

Film	Russell	Bobby	Dennis	Clifford
Shaolin and Wu-Tang	$7	$5	$3	$2
Drunken Master	6	4	2	1
The 36th Chamber of Shaolin	5	3	1	0
Fist of Fury	4	2	0	0
Boxer from Shantung	3	1	0	0

a. If the friends gather in a living room, is showing the films a public good? Explain.

b. If it costs $8 to rent a movie, how many movies should the friends rent to maximize total surplus?

c. If they choose the optimal number from part (b) and split the cost of renting the films equally, how much surplus does each person obtain from watching the films?

d. Is there any way to split the cost to ensure that everyone benefits? What practical problems does this solution raise?

e. Suppose they agree in advance to choose the efficient number and split the rental cost equally. When Russell is asked his willingness to pay, will he have an incentive to tell the truth? If so, why? If not, what will he be tempted to say?