Suppose That a Smoker and a Non-Smoker Are Seated Next

question 47

Multiple Choice

Suppose that a smoker and a non-smoker are seated next to each other in a restaurant. This restaurant does not offer a non-smoking section. The smoker is indifferent between 1) smoking and 2) not smoking and consuming a $6 dessert. The non-smoker values being able to eat in a smoke-free environment at $10. According to the Coase Theorem, and assuming no bargaining costs, what will happen?

• A)The smoker will continue to smoke because that is his right.
• B)The smoker will stop smoking, just to be a nice guy.
• C)The non-smoker will offer to pay the smoker between $6 and $10 to stop smoking, but the smoker will refuse because he has the right to smoke.
• D)The non-smoker will offer to pay the smoker between $6 and $10 to stop smoking, and the smoker will accept the money and refrain from smoking.

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Definitions:

Conscious Memories

Memories that can be intentionally recalled, reflecting experiences we are aware of.

Limbic System

A complex system of nerves and networks in the brain, involving several areas near the edge of the cortex concerned with instinct and mood. It controls the basic emotions (fear, pleasure, anger) and drives (hunger, sex, dominance, care of offspring).

Forebrain

The anterior part of the brain, including the cerebrum and structures related to it, responsible for complex cognitive, sensory, and motor functions.

Cerebral Cortex

The outermost layer of the brain, involved in high-level functions such as sensory perception, cognition, and motor control.