Suppose you pay 14 to see george clooney in his next movie...

Suppose you pay $14 to see George Clooney in his next movie and that mr. clooney received in it. This means that You and george clooney benefit from this transaction, you receive a consumer surplus of $14, you would be better off if you were more self-reliant in the movie market, george clonney receives a producer surplus of $40 million

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. Within the dorm room, is the showing of a movie a public good? Why or why not? b. If it costs $8 to rent a movie, how many movies should the roommates rent to maximize total surplus? c. If they choose the optimal number from part (b) and then split the cost of renting the movies equally, how much surplus does each person obtain from watching the movies? 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 to split the cost of the movies equally. When Steven 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? f. What does this example teach you about the optimal provision of public goods?

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