Zaria and Hannah Are Roommates

question 133

Multiple Choice

Zaria and Hannah are roommates. Zaria assigns a $30 value to smoking cigarettes. Hannah values smoke-free air at $15. Which of the following scenarios is a successful example of the Coase theorem?

• A)Hannah offers Zaria $20 not to smoke.Zaria accepts and does not smoke.
• B)Zaria pays Hannah $16 so that Zaria can smoke.
• C)Zaria pays Hannah $14 so that Zaria can smoke.
• D)Hannah offers Zaria $15 not to smoke.Zaria accepts and does not smoke.

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Definitions:

Credit Sale

A transaction where the goods or services are provided to the customer with payment to be made at a later date.

Accounts Receivable

This refers to the amount of money customers are yet to pay a company for the products or services which have already been provided.

Sales Revenues

Revenue generated through the sales of goods or services throughout a certain period.

Credit Sales

Sales made by a business wherein the payment is postponed, leading to the creation of an account receivable.