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Unformatted text preview: shots level by subsidizing the consumption of flu shots. 2. Answer Question 6 on page 222 in Mankiw (5 th edition). 3. Jones and Smith are neighbors. Jones loves his dog very much but the dog barks a great deal and annoys Smith. Jones receives $100 of benefits from his dog and Smith suffers $60 of damages from the barking. (a) From an efficiency perspective, should Jones be allowed to keep his dog? (b) Suppose the town where Jones and Smith live does not have an ordinance against dogs. Jones and Smith can bargain at zero cost. Will they reach an agreement where Jones gives up his dog? (c) Now suppose the town passes an ordinance that says that dogs are banned if someone in the neighborhood objects to a dog. As before, Jones and Smith can bargain at zero cost. Will Jones be allowed to keep his dog?...
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This note was uploaded on 09/25/2011 for the course BMGT 220 taught by Professor Bulmash during the Spring '08 term at Maryland.
- Spring '08