Exhibit 14-3 Impact of Flights on House Value
Each Time

question 68

Multiple Choice

Exhibit 14-3 Impact of flights on house value
Each time Orville flies over Wilber's house, the noise reduces the value of Wilbur's house. The table shows the profits to Orville of each flight, and the value of Wilbur's house. $$\begin{array} { | c | c | c | c | } \hline \begin{array} { c } \text { Number } \\\text { of flights }\end{array} & \begin{array} { c } \text { Total } \\\text { profits }\end{array} & \begin{array} { c } \text { Marginal } \\\text { profits }\end{array} & \begin{array} { c } \text { Value of Wilbur's } \\\text { house }\end{array} \\\hline 1 & \$ 10,000 & \$ 10,000 & \$ 100,000 \\2 & 18,000 & 8,000 & 95,000 \\3 & 24,000 & 6,000 & 90,000 \\4 & 28,000 & 4,000 & 85,000 \\5 & 30,000 & 2,000 & 80,000 \\\hline\end{array}$$
-As shown in Exhibit 14-3, if Wilbur has the property right to have no planes flying over his house, but Orville is allowed to negotiate with Wilber, what will be the number of flights?

• A) 2.
• B) 3.
• C) 4.
• D) 5.