Chad's Maple Tree Hangs Over Amy's Fence and Drops Leaves

question 115

Multiple Choice

Chad's maple tree hangs over Amy's fence and drops leaves into her yard each autumn.The benefit to Chad of lower utility bills due to the tree's shade in the summer is $300.The cost to Amy of having her lawn cleaned and reseeded is $350.Based on the Coase theorem,

• A)Chad should pay Amy $400 so that he may keep the tree.
• B)Chad should pay Amy $350 to have her lawn repaired and cleaned.
• C)Amy should pay Chad $325 to cut down the tree.
• D)Amy should build a fence.

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Definitions:

Limit Dimensioning

A dimensioning method where two limits of size are provided, giving the minimum and maximum allowable dimensions for manufacturing.

Maximum

The highest allowable limit for a dimension, value, or quantity.

Minimum

The lowest value or amount permissible or possible in a given set of conditions or contexts, often referred to in design, mathematics, and statistics.

Diameter Symbol

A symbol (∅) used in technical drawings to indicate that a dimension applies to a circle's diameter.