Paul Owns a Mushroom Farm

question 72

Multiple Choice

Paul owns a mushroom farm.The smell from the farm reduces the value of adjacent houses by a total of $30 000.Suppose that the benefit of the mushroom farm to Paul is $20 000.Assuming that Paul has the legal right to own the farm, a possible private solution to this problem is that:

• A)adjacent property owners pay $20 000 to Paul to stop farming mushrooms
• B)Paul pays the adjacent property-owners $25 000 for their loss in house-values
• C)adjacent property owners pay $25 000 to Paul to stop farming mushrooms
• D)there is no private solution that would improve this situation

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Definitions:

Drawer's Signature

is the signature of the person who has written and is responsible for the financial instrument, such as a check, authorizing its use and the payment it represents.

Customer's Negligence

A situation where a customer's failure to exercise reasonable care results in harm or damage.

Re-Credit

The process of restoring a previously deducted amount back into an account or credit rating.

Dishonored

describes a financial instrument, such as a check or a bill, that has been refused payment by the bank or person it was presented to.