Taylor lives in a residential neighborhood that prides itself on well-groomed lawns.Taylor's neighbors find that the collective marginal benefit of someone else's well-groomed lawn is $10.Taylor,however,dislikes yard work and receives zero net benefit from an unkempt lawn and a net benefit of -$1 for a well-groomed lawn;the cost of maintaining the lawn is a dollar more than the benefit of having a well-groomed lawn. $$\begin{array} { l c c }
& \text { Unkempt } & \text { Well-groomed } \
\text { Net Value to Taylor } & 0 & - 1 \
\text { Net Value to Taylor's neighbors } & 0 & + 10
\end{array}$$
Refer to the information given above.If Taylor's neighbors pay Taylor $5 to maintain his lawn,Taylor will have a net benefit of ___ and the neighbors will have a net benefit of _____.

Question

Taylor lives in a residential neighborhood that prides itself on well-groomed lawns.Taylor's neighbors find that the collective marginal benefit of someone else's well-groomed lawn is $10.Taylor,however,dislikes yard work and receives zero net benefit from an unkempt lawn and a net benefit of -$1 for a well-groomed lawn;the cost of maintaining the lawn is a dollar more than the benefit of having a well-groomed lawn. $$\begin{array} { l c c } 
& \text { Unkempt } & \text { Well-groomed } \
\text { Net Value to Taylor } & 0 & - 1 \
\text { Net Value to Taylor's neighbors } & 0 & + 10
\end{array}$$
Refer to the information given above.If Taylor's neighbors pay Taylor $5 to maintain his lawn,Taylor will have a net benefit of ___ and the neighbors will have a net benefit of _____.

Quizplus · Accepted Answer

Taylor's net benefit is -$1 from having a well-groomed lawn, but he receives $5 from his neighbors, so his net benefit is +$4. The neighbors' net benefit is +$10 from Taylor's well-groomed lawn, but they pay Taylor $5, so their net benefit is +$5.

Taylor Lives in a Residential Neighborhood That Prides Itself on Well-Groomed