Taylor’s neighbors would be willing to pay Taylor ___ to keep a well-groomed lawn. a) $1 b) more than $1 but less than $5 c) more than $10 d) no more than $10

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23.07.2022 - 23:41

Taylor’s neighbors would be willing to pay Taylor ___ to keep a well-groomed lawn. a) $1 b) more than $1 but less than $5 c) more than $10 d) no more than $10

Question:

Taylor lives in a residential neighborhood that prides itself on well-groomed lawns. Taylor’s neighbors find that the collective marginal benefit of someone else’s well-groomed lawn is $10. Taylor, however, dislikes yard work and receives zero net benefits from an unkempt lawn a net benefit of -$1 for a well-groomed lawn; the cost of maintaining the lawn is a dollar more than Taylor’s benefit of having a well-groomed lawn.

	Unkempt	Well-groomed
Net value to Taylor	0	-1
Net value to Taylor’s neighbors	0	+10

Taylor’s neighbors would be willing to pay Taylor _____ to keep a well-groomed lawn.

a) $1

b) more than $1 but less than $5

c) more than $10

d) no more than $10

Answers (1)

Cordelia April 4, 2023 в 21:36

The answer is c) more than $10. Taylor's neighbors have a collective marginal benefit of $10 from someone else's well-groomed lawn. This means that if Taylor keeps their lawn well-groomed, their neighbors will collectively benefit by $10. However, Taylor only receives a net benefit of -$1 from a well-groomed lawn. This means that the cost of maintaining a well-groomed lawn is $1 more than Taylor's benefit of having one. Therefore, for Taylor to keep their lawn well-groomed, their neighbors would need to pay them more than $10 to cover the cost of maintenance and provide Taylor with a net benefit. Option c) is the only option that exceeds the $10 threshold.

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