Multiple Choice
The benefit of an additional unit of a public good is:
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8. The Types of Goods
Public Goods: Demand Curve and Optimal Quantity
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:The marginal benefit from renting the third movie is:
A
\$36
B
\$8
C
\$5
D
\$3
Verified step by step guidance1
Identify the marginal benefit for each roommate for the third movie, Saw III. According to the table, Ricky's willingness to pay for Saw III is \$5, and Martin's willingness to pay is \$3.
Calculate the total marginal benefit for both roommates by adding their individual marginal benefits for the third movie. This is done by adding Ricky's \$5 and Martin's \$3.
The sum of the individual marginal benefits represents the total marginal benefit from renting the third movie.
Compare the calculated total marginal benefit with the options provided in the problem to determine which one matches.
Understand that the marginal benefit is the additional benefit received from consuming one more unit of a good or service, in this case, the third movie in the series.
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