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 $1500 to Lane and $1000 to Riley.Irrespective of who pays for the paving both people will benefit from it.
Suppose the cost of paving the driveway is $2000,it is _____ for them to share its cost,because then they will have a total economic _______.

Question

Quizplus · Accepted Answer

The total value of the paved driveway to both Lane and Riley is $2500 ($1500 + $1000), which is greater than the cost of $2000. Therefore, sharing the cost is efficient and results in a surplus of $500.

Lane and Riley Are the Only Two Residents in a Neighborhood,and