Suppose That a Bee Farmer (To Make Honey) Is Located

question 93

True/False

Suppose that a bee farmer (to make honey) is located next to an apple orchard. According to Ronald Coase, since the bees pollinate the apple flowers, the apple farmer should pay the bee farmer to internalize the externality.

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Definitions:

Listing Agreement

A contract between a property owner and a real estate agent, authorizing the agent to act on the owner’s behalf in the sale of the property.

Privity of Contract

A principle in contract law stating that only parties involved in the contract have the right to sue to enforce their rights or claim damages.

Commission

A fee paid for services, typically a percentage of the transaction value, to an agent or salesperson for facilitating or completing a sale.

Agreement of Purchase and Sale

A legally binding contract between a buyer and seller detailing the terms and conditions of the sale of property.