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Mr Leghorn Lives Next Door to Mr

Question 3

Multiple Choice

Mr. Leghorn lives next door to Mr. Fudd. During hunting season, Mr. Fudd likes to shoot rabbits in his backyard, an activity which he values at $900. The noise from the shooting disturbs Mr. Leghorn and prevents him from taking afternoon naps, which he values at $500. If Mr. Leghorn has the legal right to stop Mr. Fudd from hunting, the socially optimal outcome is for:


A) Mr. Fudd to stop hunting.
B) Mr. Fudd to pay Mr. Leghorn between $500 and $900 to continue hunting.
C) Mr. Leghorn to pay $500 or less to get Mr. Fudd to stop hunting.
D) Mr. Fudd to pay Mr. Leghorn less than $500 to continue hunting.

Correct Answer:

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