2. Suppose your neighbor likes to host parties at their house. They value having these parties at $200. These parties, however, impose a cost on you due to the noise they make. a. If your disutility is $100 from the noise being made, and you have the right to it being quiet, is there a solution that you and your neighbor can agree on? If so, what is it? b. If your disutility is $250 from the noise being made, and you have the right to no noise being made, is there a solution that both of you could agree on? If so, what is it? If not, what can change in terms of property rights to make an agreement possible?

2. Suppose your neighbor likes to host parties at their house. They value having these parties at $200. These parties, however, impose a cost on you due to the noise they make. a. If your disutility is $100 from the noise being made, and you have the right to it being quiet, is there a solution that you and your neighbor can agree on? If so, what is it? b. If your disutility is $250 from the noise being made, and you have the right to no noise being made, is there a solution that both of you could agree on? If so, what is it? If not, what can change in terms of property rights to make an agreement possible?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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