Q Sun Oct 16 6:03 PM Safari File Edit View History Bookmarks Develop Window Help ng.cengage.com X + Student Porta.. h ENT-320 Top.. VistaPrint | St... C MindTap - Ce... Course Hero W Prohormone.. K Best SARMS. The Safety, P.. G how to scree.. ot ? 5 PM CENGAGE MINDTAP Q Search this course X Topic 3 Assignment 7. Ch. 11 Problems and Applications Q5 ot 18 PM 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: A-Z t Willingness to Pay 15 PM (Dollars) Kevin Rajiv Yakov Charles First film 7 5 3 2 Second film 6 4 N ot 5 PM Third film 5 3 o o ? Fourth film 4 N Fifth film 1 O 3 bongo ot 0 PM Within the dorm room, the showing of a movie _ a public good. If it costs $8 to rent a movie, the roommates si is not ht movies in order to maximize the total surplus. ot is 8 PM Suppose the roommates choose to rent the optimal number of movies you just indicated and then split the cost of renting equally. A+ This means that each roommate will pay $ ot 6 PM 4,559 OC1 12 166 Safari File Edit View History Bookmarks Develop Window Help Sun Oct'lG 6:03 PM 0 0 ED V 0 E ng,cengage.com n ,i: , i : lc MindTap-Ce... E Cullie' a : i. CENGAGE | MINDTAP Topic 3 Assignment This means that each roommate will pay 5 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 Raj iv Yakov Charles In order to split the cost in a way that ensures that everyone benets, the cost could be divided up based on the benets each roommate receives. The practical problem with this solution is that each roommate has an incentive to V the value of the movies to him understate Suppose they agree in advance to choose the efcient number and to split the cos . equally. True or False: When Kevin is asked his willingness to pay, he will have an incentive - th. True False 6 Safari File Edit View History Bookmarks Develop Window Help . Sun Oct'lG 6:03 PM . . ED v [j E ngcengagecom n 7.; , . : lc MindTap-Ce... E CquCe' a : i. CENGAGE | MINDTAP Topic 3 Assignment the movies. Total Willingness to Pay Consumer Surplus Roommate (Dollars) (Dollars) Kevin Raj iv Vakov Charles In order to split the cost in a way that ensures that everyone benets, the cost could be divided up based on the benets each roommate receives. The practical problem with this solution is that each roommate has an incentive to V the value of the movies to him. Suppose they agree in advance to choose the efcient 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. True have False = do not have This examples teaches you that the optimal provision of a public good will occur if individuals v an incentive to hide their valuation of Continue withoul saving the good