Paul regularly rehearses polka music with his band, Paul's Popular Polka (PPP). Rehearsing in his garage saves the band $550 per year by NOT having to rent practice space. Unfortunately, practicing in the garage means that his neighbor, Sandra, cannot enjoy her backyard paradise. The value to Sandra of using her backyard to relax is $650 per year.

a) (10) Is it efficient for PPP to rehearse in the garage? Explain.

b) (15) If the law gives PPP the right to practice in the garage, how much is Sandra willing to pay PPP to stop? What's the minimum PPP would accept? Explain.