Assume That Your Roommate Is Very Messy

question 146

Multiple Choice

Assume that your roommate is very messy. Suppose she gets a $25 benefit from being messy but imposes a $50 cost on you. The Coase theorem would suggest that an efficient solution would be for you to

• A)pay your roommate at least $25 but no more than $50 to clean up after herself.
• B)pay your roommate at least $51 to clean up after herself.
• C)charge your roommate at least $25 to have you clean up after her.
• D)charge your roommate at least $50 but no more than $100 to keep you from complaining about the mess.

---

Definitions:

Profit

The financial gain realized when the revenue generated from business activities exceeds the expenses, costs, and taxes involved in sustaining the activity.

Entire Organization

Refers to the whole institution or company, including all of its employees, structures, and functions.

Functional Designs

Designs that prioritize the practicality and function of a product, facility, or system over aesthetic considerations.

Economical

Economical pertains to the efficient and judicious use of resources, often with the aim of minimizing cost and waste while achieving a specific purpose or outcome.