Andy owns a Candy factory with noisy machines which disturb his neighbor Barb. Andy prots from running his noisy factory by TIA =100,000. Producing candy without making noise would be costly for Andy if Andy were forced to run his factory silently, the prots of the factory would fall by 60,000 so he would only make a prot of 40,000. Otherwise, Andy could just shut down his factory entirely and earn nothing. Barb gets a payoff of HB =70,000 from a quiet neighborhood. She will get a payoff of zero (TlB =0) if she has to endure Andy's noise. Barb could wear earplugs, but that discomfort and inconvenience would leave her with a payoff of only 113 =20,000. Question 1 1 pts The efcient outcome is for Andy to [SElECtl V and for Barb to [ Select] v Question 2 1 pts Suppose Andy has a property right to be noisy if he wants. He is not required to compensate Barb. Without bargaining, Andy will choose to [SEIeCtl V and Barb will choose to [ Select] v Question 3 1 pts Suppose Andy has a property right to be noisy if he wants. He is not required to compensate Barb. What is Andy's threat value? S Question 4 1 pts Suppose Andy has a property right to be noisy if he wants. He is not required to compensate Barb. What is Barb's threat value? S Question 5 1 pts Suppose Andy has a property right to be noisy if he wants. He is not required to compensate Barb. What is the cooperative surplus from bargaining? Enter zero if there is no potential bargain. S Question 6 1 pts Suppose Andy has a property right to be noisy if he wants. He is not required to compensate Barb. If bargaining is possible and they each have equal bargaining power, what will occur? [ Select ] barb will pay andy andy will pay barb no bargain/exchange will occur 1 pts Suppose Andy has a property right to be noisy if he wants. He is not required to compensate Barb. Assuming they have equal bargaining power and bargaining is possible, what will the nal, after bargaining payoff to Andy be? S Question 8 1 pts Suppose Andy has a property right to be noisy if he wants. He is not required to compensate Barb. Assuming they have equal bargaining power and bargaining is possible, what will the nal payoff after bargaining to Barb be? S Question 9 1 pts Suppose Barb is given an injunction against the noise nuisance from Andy's factory, requiring Andy to either shut down or operate silently. In the absence of bargaining, what will occur? Barb will [Select] V Question 10 1 pts Suppose Barb is given an injunction against the noise nuisance from Andy's factory, requiring Andy to either shut down or operate silently. If bargaining is possible, what is Andy's threat value? Question 11 1 pts Suppose Barb is given an injunction against the noise nuisance from Andy's factory, requiring Andy to either shut down or operate silently. If bargaining is possible, what is Barb's threat value? Question 12 1 pts Suppose Barb is given an injunction against the noise nuisance from Andy's factory, requiring Andy to either shut down or operate silently. If bargaining is possible, what is the cooperative surplus? Enter zero if there is no surplus to be had from bargaining. Question 13 3 pts Suppose Barb is given an injunction against the noise nuisance from Andy's factory, requiring Andy to either shut down or operate silently. If bargaining is possible, and they each have equal bargaining power, what will occur? ' [ Select ] \\/ ' After bargaining, what will each person do? Andywill' [Select] V 'and Barbwill [Select] V Question 14 3 pts If Andy and Barb have equal bargaining power, what price will they agree to for the transaction described in the previous question? ' ' After bargaining, what is Andy's nal payoff? ' ' After bargaining, what is Barb's nal payoff? ' ' Question 15 1 pts Suppose Andy is now allowed to be noisy if he chooses, but Barb has a liability right to collect damages for any harms she bears from the noise. Note that if she has earplugs, she does not bear any harms from the noise, so she will only be paid if Andy operates noisily and she does not wear earplugs (she is not paid any damages for wearing earplugs). In the absence of bargaining, Andy will [59'9\"] V , and Barb will [Select] \\/ Question 16 1 pts Suppose Andy is now allowed to be noisy if he chooses, but Barb has a liability right to collect damages for any harms she bears from the noise. Note that if she has earplugs, she does not bear any harms from the noise, so she will only be paid if Andy operates noisily and she does not wear earplugs (she is not paid any damages for wearing earplugs). If bargaining is possible, what is Andy's threat value? Question 17 1 pts Suppose Andy is now allowed to be noisy if he chooses, but Barb has a liability right to collect damages for any harms she bears from the noise. Note that if she has earplugs, she does not bear any harms from the noise, so she will only be paid if Andy operates noisily and she does not wear earplugs (she is not paid any damages for wearing earplugs). If bargaining is possible, what is Barb's threat value? Question 18 Suppose Andy is now allowed to be noisy if he chooses, but Barb has a liability right to collect damages for any harms she bears from the noise. Note that if she has earplugs, she does not bear any harms from the noise, so she will only be p: Andy operates noisily and she does not wear earplugs (she is not paid any damages for wearing earplugs). If bargaining is possible, what is the cooperative surplus? Question 19 Suppose Andy is now allowed to be noisy if he chooses, but Barb has a liability right to collect damages for any harms she bears from the noise. Note that if she has earplugs, she does not bear any harms from the noise, so she will only be p: Andy operates noisily and she does not wear earplugs (she is not paid any damages for wearing earplugs), If bargaining occurs and they have equal bargaining power, what will occur? [ Select] V After bargaining, what will each person do Andy will [Select] v Barb will [Select] V Question 20 Continuing with the previous question, if they have equal bargaining power, what price will they agree to (enter zero if no bargain will result), Andy's nal payoff after bargaining is Barb's nal payoff after bargaining is
