Dick owns a dog whose barking annoys Dick's neighbor Jane. Dick receives personal benefit from owning the dog, and Jane bears a cost of Dick's ownership of the dog. Assuming Jane has the legal right to peace and quiet, which of the following statements is correct?
A)If Dick's benefit exceeds Jane's cost, government intervention is necessary.
B)Dick will pay to keep his dog if his benefit exceeds Jane's cost.
C)If Jane's cost exceeds Dick's benefit, Dick will pay Jane to keep his dog.
D)If Jane has the legal right to peace and quiet, no further transactions will be mutually beneficial.

Question

Quizplus · Accepted Answer

If Dick's benefit from owning the dog exceeds Jane's cost, Dick will be willing to pay Jane to keep the dog, as it is in his interest to do so.

Dick Owns a Dog Whose Barking Annoys Dick's Neighbor Jane