4. In which of the following situations is the Coase Theorem likely to apply? Explain. (3 points each, total 12 points)?

1. The neighbor who lives above you in the apartment building loves to play old Patti LaBelle records at loud volume early in the morning. In fact, his favorite song seems to be "If Only You Knew." You hate old Patti LaBelle songs and this one in particular.

1. You have just moved to Los Angeles and quickly discover that you are allergic to smog. It causes you great pain in breathing and limits your ability to work. Furthermore, you have medical expenses related to treatment for its health effects on you.

1. Recent medical research has revealed a specific cause of birth defects related to a certain drug prescribed for pregnant women in the 1980s.

1. The water in a huge underground aquifer in the Great Plains region of the U.S. is being nitrate contaminated due to agricultural fertilizer use throughout the region. As a homeowner in this region, you find that your water must be treated in order to be safe for drinking.