Suppose That Charles Wants to Dine at a Fancy Restaurant

question 65

Multiple Choice

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?

• A)Sam continues to smoke because he has a right to smoke in the smoking section.
• B)Charles offers Sam between $15 and $40 not to smoke. Sam accepts, and both parties are better off.
• C)Charles offers Sam between $15 and $40 not to smoke. Sam declines because he has a right to smoke in the smoking section.
• D)Only a government policy banning smoking in restaurants will solve this problem.

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Definitions:

Organic Product

A compound that results from the organic chemical reaction, often characterized by its complex carbon-based molecular structure.

Syn Fashion

A descriptive term for a stereochemical arrangement in which substituents on adjacent carbons are oriented on the same side of a molecule or double bond.

Dihydroxylation

A chemical process that introduces two hydroxyl (-OH) groups across a double bond in alkenes, producing diols.

Hydroboration

A chemical reaction that adds boron and hydrogen across the double bond of alkenes to form organoboranes, a helpful intermediate in organic synthesis.