Tuesday's temp = Sunday's temp + 5° - 8° = Sunday's temp - 3°
Then ...
Sunday's temp = Tuesday's temp + 3°
Sunday's high temperature was 3° warmer than Tuesday's.
-4 —> -4 + -6 = -10, so -4 is greater as it is less negative
Answer:
b. Mary pays Cathy $16 so that Mary can smoke.
Step-by-step explanation:
Coase's theorem suggests that in a situation where a bargaining situation, where there is efficient pareto allocation, economic agents can negotiate and come to a compensation agreement on the loss of welfare.
Pareto Optimal is a state where resources are allocated as efficiently as possible. Any reallocation of resources to improve one individual's situation will necessarily worsen another individual's condition. That is the case in point. Mary has a $ 30 utility for smoking, while Cathy has a $ 15 utility for fresh air. If both are in the same environment, Mary's activity will damage Chaty's usefulness. A deal would be if Mary offered Cathy a reward beyond her usefulness, and was then allowed to smoke. Since Cathy's utility is $ 15, if Mary offers $ 16, Cathy's utility will be greater with Mary smoking than before.
