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stars_and_moon stars_and_moon
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7 years ago
Suppose the Coase Theorem is used to determine the efficient quantity of smoking in a restaurant.  Property rights are assigned to non-smokers in the restaurant.  Which of the following is an example of strategic behavior that may hinder the ability of the Coase Theorem to give us the efficient amount of smoking?
A) Some of the customers in the restaurant don't mind second-hand smoking, but they are going to lie and say that smoking harms them so that the smokers compensate them.
B) Some customers in the restaurant really like to smoke so they will be willing to pay a lot of money to smoke even though some customers don't like second-hand smoke.
C) Some customers in the restaurant get sick if they are around second-hand smoke so they will require a lot of compensation in order to allow smoking.
D) There are a lot of people in the restaurant so it will take a lot of time to go around to each table and see how much the table would have to be compensated if a person smokes.
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kingbykingby
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7 years ago
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#2
7 years ago
Perfectly answered Smiling Face with Open Mouth

Cheers
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#3
7 years ago
Yup, vote with confidence!
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