Mary and Cathy are roommates. Mary assigns a $30 value to smoking cigarettes. Cathy values smoke-free air at $15 . Which of the following scenarios is a successful example of the Coase theorem?
a. Cathy offers Mary $20 not to smoke. Mary accepts and does not smoke.
b. Mary pays Cathy $16 so that Mary can smoke.
c. Mary pays Cathy $14 so that Mary can smoke.
d. Cathy offers Mary $15 not to smoke. Mary accepts and does not smoke.
b
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A) money price. B) relative price. C) budget constraint. D) divisible good.
Refer to Table 7-6. Which country has a comparative advantage in producing belts?
A) Estonia B) Morocco C) both countries D) neither country
Winona's Fudge Shoppe is maximizing profits by producing 1,000 pounds of fudge per day. If Winona's fixed costs unexpectedly increase and the market price remains constant, then the short run profit-maximizing level of output
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The four major forms of economic integration include
A) Customs union. B) Economic union. C) Common market. D) Free trade area. E) All of the above.