Mary and Cathy are roommates. Mary assigns a $30 value to smoke cigarettes. Cathy values smoke-free air at $15. Which of the following scenarios is a successful example of the Coase theorem?
a. Cathy offers Mary $20 not to smoke. Mary accepts and does not smoke.
b. Mary pays Cathy $16 so that Mary can smoke.
c. Mary pays Cathy $14 so that Mary can smoke.
d. Cathy offers Mary $15 not to smoke. Mary accepts and does not smoke.
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Mary and Cathy are roommates. Mary assigns a $30 value to smoke cigarettes. Cathy values smoke-free...
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