need help - use graphs and individual images.
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: #1 Willingness to Pay (Dollars) Paolo Van Carlos Felix Larry First film 14 10 8 4 2 Second 12 Q 6 2 0 Third film 10 2 OO Fourth film 0 Fifth film 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. Roommate 1 2 3 Paolo Van Carlos Felix Larry The median roommate prefers movies. Suppose the roommates held a vote on the efficient outcome versus the median voter's preference. Complete the following table by indicating how each person would vote in this case. Roommate Efficient Outcome Median Voter Outcome Paolo Van Carlos Felix Larry efficient outcome The winning outcome according to majority rule is the median voter outcome , If one of the roommates proposed a different number of movies, his proposal could beat the winner from the previous vote. o True o False can cannot Majority rule be counted on to reach efficient outcomes in the provision of public goods.A college student has two options for meals: eating at the dining hall for $5 per meal, or eating a package of Cup 0' Soup for $2.50 per meal. Her weekly food budget is $100. Assume that she spends equal amounts on both goods. On the following graph, use the green line (triangle symbol) to draw the college student's budget constraint. Then use the black point (plus symbol) to indicate the initial optimum in this case. (\"D + 45 m Irllial Budget Canslraini 35 '1' a 31: lrlliaIDplimumlA) = D g 25 o 5'.- g 2\" NewBudgelcansn-aint W E. '5 .' g m _ New omnnum [B] o 2 4 a a 1o 12 1a 1a 1a 20 Meat; aching Hal Suppose the price of a Cup 0' Soup now falls to $2. Assume that the student now spends 70 percent of her income on dining hall meals. 0n the preceding graph, use the blue line (circle symbol) to draw the college student's new budget constraint. Then use the grey point (star symbol) to indicate the new optimum in this case. decreased As a result of this price change, the quantity of Cup 0' Soup packages consumed d- ' This means that Cup 0' Soup must be . ' aood, and the income effect was dominated by V the substitution effect. outweighed 0n the following graph, use the blue line (circle symbol) to draw the student's demand for Cup 0' Soup by plotting the optimum information from points A and B. CD III} 3.5] Demand and 25] 7.00 Price 1.5] 11!: 0.5] I} 10 12 1' 16 1B 211 22 24 26 Quamy of Cup 0' Soup True or False: Cup 0' Soup is not a Giifen good. TRUE l FALSE #2
