2) Tennyson, Mathios, and Evans and Avery are neighbors. Mathios does not like to rake leaves. If forced to rake he faces the costs described in the table. Unless Mathios rakes a lot he causes damage to his neighbors (see chart) since the wind blows unraked leaves onto the property of Tennyson, Evans, and Avery. Mathios and Tennyson are the only two parties who will negotiate with each other. Everyone else hates each other so there is no negotiation. Mathios Tennyson Evans Avery Never 0 300 240 1000 Little 60 180 160 700 Moderate 100 100 100 500 All the time 500 0 0 0 Evans sues Mathios. Suppose a judge and each party knows all of the information in this problem and also knows that Mathios could build a fence for $70 that would reduce the amount of leaves that escape his property thus reducing damages to each of his neighbors by 50%. Mathios does not care about having some leaves on his lawn so does not suffer damage from this. His only costs are the cost of raking. Avery has a large property and can build a fence for $150 to eliminate all damage to her property and reduce the existing damage to all of the other neighbors by 50%. If both Mathios and Avery build the fence then the damages to Tennyson and Evans would be reduced by 75%. a) (25 points) What is the socially efficient outcome that the judge should try to get to? b) (25 points) Given the negotiation assumptions made above If the judge gave the property right to Mathios what would be the costs faced by each party and would this achieve the socially efficient outcome? c) (20 points) Given the negotiation assumptions made above if the judge gave the property right to Evans what would be the total costs to all parties taken together? How does this compare to the total costs together when the property right was assigned to Mathios? 2) Tennyson, Mathios, and Evans and Avery are neighbors. Mathios does not like to rake leaves. If forced to rake he faces the costs described in the table. Unless Mathios rakes a lot he causes damage to his neighbors (see chart) since the wind blows unraked leaves onto the property of Tennyson, Evans, and Avery. Mathios and Tennyson are the only two parties who will negotiate with each other. Everyone else hates each other so there is no negotiation. Mathios Tennyson Evans Avery Never 0 300 240 1000 Little 60 180 160 700 Moderate 100 100 100 500 All the time 500 0 0 0 Evans sues Mathios. Suppose a judge and each party knows all of the information in this problem and also knows that Mathios could build a fence for $70 that would reduce the amount of leaves that escape his property thus reducing damages to each of his neighbors by 50%. Mathios does not care about having some leaves on his lawn so does not suffer damage from this. His only costs are the cost of raking. Avery has a large property and can build a fence for $150 to eliminate all damage to her property and reduce the existing damage to all of the other neighbors by 50%. If both Mathios and Avery build the fence then the damages to Tennyson and Evans would be reduced by 75%. a) (25 points) What is the socially efficient outcome that the judge should try to get to? b) (25 points) Given the negotiation assumptions made above If the judge gave the property right to Mathios what would be the costs faced by each party and would this achieve the socially efficient outcome? c) (20 points) Given the negotiation assumptions made above if the judge gave the property right to Evans what would be the total costs to all parties taken together? How does this compare to the total costs together when the property right was assigned to Mathios