Lane and Riley are the only two residents in a neighborhood, and they share the same driveway. They would like to have the driveway paved. The value of the paved driveway is $1,500 to Lane and $900 to Riley. Regardless of who pays for the paving both people will benefit from it.
If the cost of paving the driveway is $2,000 and Lane proposes that they each pay 50 percent of this cost, then Riley ________ agree to Lane's proposal because ________.
A) will; repaving the driveway would increase total economic surplus
B) will not; repaving the driveway would lower total economic surplus
C) will; if they split the cost, then Riley's economic surplus would increase
D) will not; if they split the cost, then Riley's economic surplus would decrease
Correct Answer:
Verified
Q95: If a boxing fight is shown on
Q96: There are 100 residents in the City
Q97: If the popular television show The Bachelor
Q98: One disadvantage of using the government to
Q99: If a boxing fight is shown on
Q101: Will and Grace have adjoining unfenced back
Q102: The presence of an unregulated negative externality
Q103: Will and Grace have adjoining unfenced back
Q104: The government subsidizes education because:
A)it is a
Q105: Beyond the provision of public goods, government
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents