Figure 5-16 Amit and Bree Are the Only Two Homeowners on an Only

question 168

Multiple Choice

Figure 5-16

Amit and Bree are the only two homeowners on an isolated private road. Both agree that installing street lights along the road would be beneficial and want to do so. Figure 5-16 shows their willingness to pay for different quantities of street lights, the market demand for street lights, and the marginal cost of installing the street lights.
-Refer to Figure 5-16.Suppose Amit and Bree know each other's preferences so that it is not possible for one to deceive the other.Which of the following statements best describes the circumstances under which the optimal quantity of street lights could be achieved?

• A)The optimal quantity will be installed only if the two parties agree to pay according to their willingness to pay as indicated by their respective demand curves.
• B)Because there are only two consumers, it is likely that private bargaining will result in the optimal quantity being installed.
• C)The optimal quantity will be installed only if the two parties split the cost of installation equally.
• D)The optimal quantity will be installed only if Bree pays for the entire installation cost.

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Definitions:

Dominant Gene

A gene that expresses its trait in the phenotype even when heterozygous, overshadowing the effect of a recessive gene if present.

Recessive Gene

A gene that can lead to a phenotype only when two copies are present, as opposed to a dominant gene where one copy is sufficient for expression.

Genetic Map

A representation of the positions of genes or markers on chromosomes, showing their relative distances.

Cleft Palate

A congenital split in the roof of the mouth that occurs when the tissue doesn't fuse together during pregnancy.