Multiple Choice
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.
Correct Answer:
Verified
Correct Answer:
Verified
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