Zaria and Hannah are roommates. Zaria assigns a $30 value to smoking cigarettes. Hannah values smoke-free air at $15. Which of the following scenarios is a successful example of the Coase theorem?
A)Hannah offers Zaria $20 not to smoke.Zaria accepts and does not smoke.
B)Zaria pays Hannah $16 so that Zaria can smoke.
C)Zaria pays Hannah $14 so that Zaria can smoke.
D)Hannah offers Zaria $15 not to smoke.Zaria accepts and does not smoke.

Question

Quizplus · Accepted Answer

The Answer of Zaria and Hannah are roommates. Zaria assigns a $30 value to smoking cigarettes. Hannah values smoke-free air at $15. Which of the following scenarios is a successful example of the Coase theorem?
A)Hannah offers Zaria $20 not to smoke.Zaria accepts and does not smoke.
B)Zaria pays Hannah $16 so that Zaria can smoke.
C)Zaria pays Hannah $14 so that Zaria can smoke.
D)Hannah offers Zaria $15 not to smoke.Zaria accepts and does not smoke.

Zaria and Hannah Are Roommates