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ID: 1214581 • Letter: P
Question
Please give your genuine time, carefulness, and full consideration into helping me with all of the questions including the GRAPHS. Too many times, I am offered half answers on here. Be aware of all questions (don't forget the gray box after the chart). Thank you so much in advance.
5. Majority rule and efficiency
Raphael, Susan, Alex, Becky, and Musashi share a five-bedroom house and are all huge New York Yankees fans. The only way they can watch every away game is by getting satellite TV service. Since the TV is located in their living room, once they have satellite service, the service has the characteristics of a public good: it is nonrival and nonexcludable. The following table shows the benefit (per month) that each roommate receives from the service. Note that the average benefit from the service is $50 per person.
A majority of roommates will vote to buy the service as long as it doesn't cost more than _______drop down options provided below_________ per month.
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DROP DOWN OPTIONS:
Benefit Roommate (Dollars) Raphael Susan Alex Becky Musashi 10 35 60 70 75 It is efficient for the roommates to buy the satellite TV service if it doesn't cost more than$ per month.Explanation / Answer
It is efficient to buy TV if it cost less than total benefit i.e 250 or 50 per person
Majority eill vote to buy if cost is less rhan 300 or 60 per perdon. In this way majority will vote i.e 3 people will vite for it as per person price is 60.
As Alex is the median voter he is critical voter
When price is 275, they will buy by majority rule but it is not efficient