Exam 9: Beyond Markets; Property and Contracts

The table given below represents the marginal valuation of a beekeeper (collecting honey) and an orchard farmer (producing mangoes).The beekeeper's opportunity cost reflects the loss in honey collection resulting from the usage of the same orchard again and again. $\begin{array}{|c|c|c|c|c|c|}\hline \text { Days used } & \begin{array}{c}\text { Total honey } \\\text { value }(\$)\end{array} & \begin{array}{c}\text { Marginal } \\\text { honey value } \\(\$)\end{array} & \begin{array}{c}\text { Beekeeper's } \\\text { opportunity cost } \\(\$)\end{array} & \begin{array}{c}\text { Total value } \\\text { of mangoes } \\\mathbf{( \$ )}\end{array} & \begin{array}{c}\text { Marginal value } \\\text { of mangoes (\$) }\end{array} \\\hline 1 & 18 & 18 & 4 & 10 & 10 \\\hline 2 & 23 & 6 & 4 & 17 & 7 \\\hline 3 & 27 & 5 & 4 & 23 & 6 \\\hline 4 & 30 & 3 & 4 & 28 & 5 \\\hline 5 & 32 & 2 & 4 & 32 & 4 \\\hline 6 & 33 & 1 & 4 & 30 & 2 \\\hline 7 & 34 & 1 & 4 & 29 & 1 \\\hline\end{array}$ -Refer to Table .What will be the maximum number of days for which the orchard owner would prefer the beekeeper to stay in his orchard without having to pay any compensation?

Mention some of the remedies to prevent violation of a low-cost contract between farmers and beekeepers.

Jeanie Reuter and Janet Rothman are tenants in first and second floor apartments.Jeanie practices her piano lessons in the morning, while Janet practices aerobics on drum beats at the same time.Further assume that the value of practice to Jeanie is $10 while the value of aerobic exercises to Janet is $6.If Jeanie has the right to practice piano peacefully, which of the following will be a feasible solution to the problem?

Which of the following remedies can be used to prevent the beekeeper and the farmer from breaking the contract?

Which of the following activities can create an external cost?

Although a LoJack benefits the community as a whole by lowering the incidence of theft, an individual car owner may prefer not to install it.

Property rights specified in a contract are always open-ended and they exhaustively specify the owner's alternatives.

Government has the power to reduce the _____ associated with air pollution by automobiles because it can force changes in car design, can impose taxes on drivers, and has the power to punish those who fail to comply.

Which of the following exemplifies inefficient legal assignment of rights with high transaction costs?

The farmer's association is a type of government with unlimited jurisdiction.

The table given below represents the marginal valuation of a beekeeper (collecting honey) and an orchard farmer (producing mangoes).The beekeeper's opportunity cost reflects the loss in honey collection resulting from the usage of the same orchard again and again. $\begin{array}{|c|c|c|c|c|c|}\hline \text { Days used } & \begin{array}{c}\text { Total honey } \\\text { value }(\$)\end{array} & \begin{array}{c}\text { Marginal } \\\text { honey value } \\(\$)\end{array} & \begin{array}{c}\text { Beekeeper's } \\\text { opportunity cost } \\(\$)\end{array} & \begin{array}{c}\text { Total value } \\\text { of mangoes } \\\mathbf{( \$ )}\end{array} & \begin{array}{c}\text { Marginal value } \\\text { of mangoes (\$) }\end{array} \\\hline 1 & 18 & 18 & 4 & 10 & 10 \\\hline 2 & 23 & 6 & 4 & 17 & 7 \\\hline 3 & 27 & 5 & 4 & 23 & 6 \\\hline 4 & 30 & 3 & 4 & 28 & 5 \\\hline 5 & 32 & 2 & 4 & 32 & 4 \\\hline 6 & 33 & 1 & 4 & 30 & 2 \\\hline 7 & 34 & 1 & 4 & 29 & 1 \\\hline\end{array}$ -Refer to Table .What would be the maximum number of days for which the orchard owner would wish to keep the beekeeper in the orchard by paying him a compensation which is sufficient to cover the latter's opportunity cost?

Jeanie Reuter and Ruth Oslen are tenants in first and second floor apartments.Jeanie practices her piano lessons in the morning, while Ruth practices aerobics on drum beats at the same time.Further assume that the value of the practice to Jeanie is $10 while the value of aerobic exercises to Ruth is $6.Which of the following is a feasible solution to the problem if the cost of negotiation is zero?

Which of the following activities can create a beneficial externality?

Which of the following is an example of a possessory property right?

Farmers can avoid the free rider problem associated with the benefits received from beekeepers by:

Which of the following is true of property rights?

Assume that the market for executive travel is perfectly competitive.If the availability of time-sharing reduces transaction costs and the owner's cost of negotiating for a single trip, which of the following situations must occur?

Investments that are specific to a relationship (i.e.of lower value elsewhere) are considered risky and require:

_____ refers to an enforceable set of promises to take certain actions over the future.

The cash or concessions present in contract terms that parties agree to in order to share risks are called: