Table of contents

1. Introduction to Macroeconomics1h 57m
2. Introductory Economic Models59m
3. Supply and Demand3h 43m
4. Elasticity2h 26m
5. Consumer and Producer Surplus; Price Ceilings and Price Floors3h 40m
6. Introduction to Taxes1h 25m
7. Externalities1h 3m
8. The Types of Goods1h 13m
9. International Trade1h 16m
10. Introducing Economic Concepts49m
11. Gross Domestic Product (GDP) and Consumer Price Index (CPI)1h 37m
12. Unemployment and Inflation1h 15m
13. Productivity and Economic Growth1h 17m
14. The Financial System1h 37m
15. Income and Consumption52m
16. Deriving the Aggregate Expenditures Model1h 22m
17. Aggregate Demand and Aggregate Supply Analysis1h 18m
18. The Monetary System1h 1m
19. Monetary Policy1h 32m
20. Fiscal Policy1h 0m
21. Revisiting Inflation, Unemployment, and Policy46m
22. Balance of Payments30m
23. Exchange Rates1h 16m
24. Macroeconomic Schools of Thought40m
25. Dynamic AD/AS Model35m
26. Special Topics11m

8. The Types of Goods

Public Goods: Demand Curve and Optimal Quantity

Macroeconomics

8. The Types of Goods

Public Goods: Demand Curve and Optimal Quantity

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Multiple Choice

Two roommates plan to spend their evening with a marathon of Saw horror movies. Because it is a marathon, they must start with the first movie in the series and continue in order. Their willingness to pay for the rental of each movie is as follows:If each movie rental costs $6, how many movies should they rent?

One movie

Two movies

Three movies

Four movies

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Verified step by step guidance

Identify the willingness to pay for each movie by both roommates from the table provided. Ricky's willingness to pay is $9, $7, $5, and $3 for Saw I, II, III, and IV respectively. Martin's willingness to pay is $7, $5, $3, and $1 for Saw I, II, III, and IV respectively.

Calculate the total willingness to pay for each movie by adding Ricky's and Martin's willingness to pay. For Saw I, the total is $9 + $7 = $16. For Saw II, it is $7 + $5 = $12. For Saw III, it is $5 + $3 = $8. For Saw IV, it is $3 + $1 = $4.

Compare the total willingness to pay for each movie with the cost of renting a movie, which is $6. Determine how many movies they should rent by checking if the total willingness to pay for each movie is greater than or equal to the rental cost.

For Saw I, the total willingness to pay is $16, which is greater than $6. For Saw II, the total willingness to pay is $12, which is also greater than $6. For Saw III, the total willingness to pay is $8, which is greater than $6. For Saw IV, the total willingness to pay is $4, which is less than $6.

Based on the comparison, they should rent the movies for which the total willingness to pay is greater than or equal to the rental cost. Therefore, they should rent Saw I, Saw II, and Saw III.