Suppose That the Marginal Benefit of Having a Security Camera

question 119

Multiple Choice

Suppose that the marginal benefit of having a security camera in the library is given by MB,at the supermarket is given by MB₁ and at the museum is given by MB₂.All values are per week.
Suppose cameras are currently allocated efficiently.Now suppose that a camera at the museum malfunctioned and it will take two weeks to replace it.Owners of the supermarket would

• A) be willing to rent the museum a camera for less than the value of the camera to the museum.
• B) not be willing to rent the museum a camera for less than the value of the camera to the museum,but managers at the library would.
• C) not be willing to rent the museum a camera for less than the value of the camera to the museum,and neither would managers at the library.
• D) exploit the situation by renting a camera to the museum for more than $U per week.

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Definitions:

Share Repurchases

It refers to the process where a company buys back its own shares from the marketplace, reducing the amount of outstanding shares.

Cash Dividend

A direct payment of profits from a company to its shareholders, typically in the form of cash.

Capital Gains Tax

A tax on the profit realized on the sale of a non-inventory asset that was greater than the amount realized on the sale.