Dick owns a dog whose barking annoys Dick's neighbor Jane. Dick receives personal benefit from owning the dog, and Jane bears a cost of Dick's ownership of the dog. Assuming Jane has the legal right to peace and quiet, which of the following statements is correct?
a. If Dick's benefit exceeds Jane's cost, government intervention is necessary.
b. Dick will pay to keep his dog if his benefit exceeds Jane's cost.
c. If Jane's cost exceeds Dick's benefit, Dick will pay Jane to keep his dog.
d. If Jane has the legal right to peace and quiet, no further transactions will be mutually beneficial.
b
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Total reserves of private banks are
A) federal reserve notes. B) all customer deposits. C) deposits held at the Fed and vault cash. D) the minimum amount banks need to hold against time deposits.
If the dollar price of a good manufactured in the U.S. is $6 and the dollar price of the same good manufactured in India is $8, should retailers of the good in the U.S. purchase the good from Indian suppliers or from American suppliers?
What will be an ideal response?
Martha Stewart earns $4,000 and she wants to save it for retirement, which is 10 years away. She can either save it in a taxable account or put it into a Roth IRA. Suppose that Martha can receive an annual rate of return of 8 percent and her marginal tax rate is 25 percent. By the time she reaches retirement, how much money would she have in either option? NOTE: Martha has to pay tax on the $4,000, so she cannot put the full amount into either the taxable account or the Roth.
What will be an ideal response?
Firms price discriminate to maximize total revenue
Indicate whether the statement is true or false