Suppose that your roommate is very untidy. Suppose she/he gets a $100 benefit from being messy but imposes a $200 cost on you. (Assume that there are no regulations against untidiness in your living quarters.) The Coase Theorem would suggest that an efficient solution can be reached where:
a. you pay your roommate at least $100 but no more than $200 to clean up after her/himself
b. you pay your
roommate at least $201 to clean up after her/himself.
c. you continue to live with your untidy roommate until you are able to make other living arrangements elsewhere.
d. your roommate pays you at least $100 to have you clean up after her/him.
a
You might also like to view...
If Japan is relatively capital rich and the United States is relatively land rich, and if food is relatively land intensive then trade between these two, formerly autarkic countries will result in
A) an increase in the relative price of food in the U.S. B) an increase in the relative price of food in Japan. C) a global increase in the relative price of food. D) a decrease in the relative price of food in both countries. E) an increase in the relative price of food in both countries.
Beyond the Fed's immediate control, a wave of pessimistic economic forecasts in the banking industry can effectively ________ e and thus ________ the money supply
A) raise, raise B) raise, reduce C) reduce, raise D) reduce, reduce