Answer Happy

Scenario 1: Robinson lives on the fish he catches from sea. A nearby steel factory dumps its toxic waste into the sea which in turn decreases fish population. If the factory uses a special mequipment, the toxic waste would be eliminated. The benefit of catching fish is $20 000 for Robinson. And the cost of installing the special equipment is $15 000. 5. Refer to Scenario 1. Assume the property rights of using sea is given to factory owner by law. Which of the following statements is correct? A) The socially efficient outcome is not installing the equipment and according to Coase Theorem, Robinson should pay an amount between (15 000 - 20 000) to factory owner to implement the socially efficient outcome. B) The socially efficient outcome is installing the equipment and according to Coase Theorem, Robinson should pay an amount between (15 000 - 20 000) to factory owner to implement the socially efficient outcome. C) The socially efficient outcome is installing the equipment and according to Coase Theorem, Robinson should pay nothing to factory owner to implement the socially efficient outcome. D) The socially efficient outcome is installing the equipment and according to Coase Theorem, factory owner should pay an amount between (15 000 - 20 000) to Robinson to implement the socially efficient outcome. 6. Refer to Scenario 1. Assume the property right of using the sea is given to Robinson by law. Which of the following statements is correct? A) The socially efficient outcome is not installing the equipment and according to Coase Theorem, factory owner should pay an amount between (15 000 - 20 000) to Robinson to implement the socially efficient outcome. B) The socially efficient outcome is installing the equipment and according to Coase Theorem, Robinson should pay less than $15 000 to factory owner to implement the socially efficient outcome. C) The socially efficient outcome is installing the equipment and according to Coase Theorem, Robinson should pay an amount between (15 000 - 20 000) to factory owner to implement the socially efficient outcome. D) The socially efficient outcome is installing the equipment and according to Coase Theorem, Robinson should pay nothing to factory owner to implement the socially efficient outcome.