Suppose That a Large Tree on Betty's Property Is Blocking

question 101

Multiple Choice

Suppose that a large tree on Betty's property is blocking Chuck's view of the lake below. Betty accepts Chuck's offer to pay Betty $100 for the right to cut down the tree. This situation describes

• A)the Coase theorem.
• B)the optimal allocation of a social good.
• C)a positive externality.
• D)a market for externality rights.

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