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)YakovCharlesGilbertoLorenzoSamFirst film18151085Second film1612851Third film149600Fourth film126300Fifth film103000 Buying a DVD costs $20, which the roommates split equally, so each pays $4 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.Roommate012345Yakov Charles Gilberto Lorenzo Sam 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.RoommateEfficient OutcomeMedian Voter OutcomeYakov Charles Gilberto Lorenzo Sam The winning outcome according to majority rule is the . If one of the roommates proposed a different number of movies, his proposal could beat the winner from the previous vote.True False Majority rule be counted on to reach efficient outcomes in the provision of public goods.

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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)
Yakov	Charles	Gilberto	Lorenzo	Sam
First film	18	15	10	8	5
Second film	16	12	8	5	1
Third film	14	9	6	0	0
Fourth film	12	6	3	0	0
Fifth film	10	3	0	0	0

Buying a DVD costs $20, which the roommates split equally, so each pays $4 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	0	1	2	3	4	5
Yakov
Charles
Gilberto
Lorenzo
Sam

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
Yakov
Charles
Gilberto
Lorenzo
Sam

The winning outcome according to majority rule is the .

If one of the roommates proposed a different number of movies, his proposal could beat the winner from the previous vote.

True

False

Majority rule be counted on to reach efficient outcomes in the provision of public goods.

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