Ty Lives in an Apartment Building and Gets a Benefit

question 316

Multiple Choice

Ty lives in an apartment building and gets a benefit from playing his stereo. Olivia, who lives next door to Ty and often loses sleep due to the loud music coming from Ty's stereo, bears a cost from the noise. Olivia is threatening to call the police to force Ty to turn down his stereo. Under which of the following conditions would Ty be able to offer Olivia some amount of money to keep her from calling the police and to allow him to continue to play his stereo loudly?

• A)The cost of the noise to Olivia must exceed the benefit of the music to Ty.
• B)The benefit of the music to Ty must exceed the cost of the noise to Olivia.
• C)The Coase Theorem guarantees that Olivia and Ty will always be able to come to an agreement that keeps Olivia from calling the police regardless of the individual benefits and costs.
• D)The cost of the noise to Olivia must exceed the benefit of the music to Ty by an amount greater than the transaction costs associated with the agreement.

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Definitions:

Persistent Symptoms

Continued signs or indications of a disease or condition that withstand standard treatments over an extended period.

Atrial Flutter

A type of abnormal heart rhythm that involves the atria, the upper chambers of the heart, beating at a fast and regular rate.

Heart Failure

A chronic condition in which the heart is unable to pump sufficiently to maintain blood flow to meet the body's needs, leading to various symptoms and complications.

Angina Pectoris

A condition marked by severe pain in the chest, often spreading to the shoulders, arms, and neck, due to inadequate blood flow to the heart.