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5. Suppose you only have one neighbor and that she enjoys loud music such that her benefit from loudness is described as TB 30d B - .12d B2, where dB is in decibels, a measure of how loud she plays her music. You on the other hand, are annoyed by her music and the cost it imposes on you can be measured as TC = 3d B +.06d B2. The contract governing the duplex clearly states that music may not be played louder than 60 dB. As the contract is only enforceable by either you or the neighbor, propose a coasian solution that will make you both better off. %3D %3D

5. Suppose you only have one neighbor and that she enjoys loud music such that her benefit from loudness is described as TB 30d B - .12d B2, where dB is in decibels, a measure of how loud she plays her music. You on the other hand, are annoyed by her music and the cost it imposes on you can be measured as TC = 3d B +.06d B2. The contract governing the duplex clearly states that music may not be played louder than 60 dB. As the contract is only enforceable by either you or the neighbor, propose a coasian solution that will make you both better off. %3D %3D

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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5. Suppose you only have one neighbor and that she enjoys loud music such that her benefit from loudness is described as TB = 30d B - .12d B2, where dB is in decibels, a measure of how loud she plays her music. You on the other hand, are annoyed by her music and the cost it imposes on you can be measured as TC = 3d B + .06d B². The contract governing the duplex clearly states that music may not be played louder than 60 dB. As the contract is only enforceable by either you or the neighbor, propose a coasian solution that will make you both better off.
Transcribed Image Text:5. Suppose you only have one neighbor and that she enjoys loud music such that her benefit from loudness is described as TB = 30d B - .12d B2, where dB is in decibels, a measure of how loud she plays her music. You on the other hand, are annoyed by her music and the cost it imposes on you can be measured as TC = 3d B + .06d B². The contract governing the duplex clearly states that music may not be played louder than 60 dB. As the contract is only enforceable by either you or the neighbor, propose a coasian solution that will make you both better off.
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