Q Question 1 1 / 1 pts Mary and Cathy are roommates. Mary assigns a $30 value to smoking cigarettes. Cathy values smoke-free air at $15. Which of the following scenarios is a successful example of the Coase theorem? Question 2 1 / 1 pts John lives in an apartment building and gets a $700 benefit from playing his stereo. Mary, who lives next door to John and often loses sleep due to the music coming from John’s stereo, bears a $1,000 cost from the noise. At which of the following offers from Mary could both Mary and John benefit from the silencing of John’s stereo? Question 3 1 / 1 pts Suppose that Charles wants to dine at a fancy restaurant, but the only available table is in the smoking section. Charles dislikes the smell of cigarette smoke. He notices that only one person, Sam, is smoking in the smoking section. Charles values the absence of smoke at $40. Sam values the ability to smoke in the restaurant at $15. Which of the following represents an efficient solution in the absence of transaction costs? Question 4 1 / 1 pts Max lives in an apartment building and gets a benefit from playing his stereo. Lily, who lives next door to Max and often loses sleep due to the loud music coming from Max’s stereo, bears a cost from the noise. Lily is threatening to call the police to force Max to turn down his stereo. Under which of the following conditions would Max be able to offer Lily some amount of money to keep her from calling the police and to allow him to continue to play his stereo loudly? Question 5 1 / 1 pts Dick owns a dog whose barking annoys Dick's neighbor Jane. Dick receives personal benefit from owning the dog, and Jane bears a cost of Dick's ownership of the dog. Assuming Jane has the legal right to peace and quiet, which of the following statements is correct?

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