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Mary and Cathy are roommates. Mary assigns a $30 value to smoke cigarettes. Cathy values smoke-free air at $15. Which of the following scenarios is a successful example of the Coase theorem? a. Cathy offers
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Mary and Cathy are roommates. Mary assigns a $30 value to smoke 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.

User Katspaugh
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1 Answer

6 votes

Answer:

b. Mary pays Cathy $16 so that Mary can smoke.

Step-by-step explanation:

User Artur Keyan
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