Question

Mr. Leghorn lives next door to Mr. Fudd. During hunting season, Mr. Fudd likes to shoot rabbits in his backyard, which activity he values at $900. The noise from the shooting disturbs Mr. Leghorn and prevents him from taking afternoon naps, which he values at $500. If Mr. Leghorn has the legal right to stop Mr. Fudd from hunting, the socially optimal outcome is for:____________
a) Mr. Fudd to pay Mr. Leghorn between $500 and $900 to continue hunting.
b) Mr. Fudd to pay Mr. Leghorn less than $500 to continue hunting.
c) Mr. Fudd to stop hunting.
d) Mr. Leghorn to pay $500 or less to get Mr. Fudd to stop hunting.

Answer 1

Answer:

A. Mr. Fudd to pay Mr. Leghorn between $500 and $900 to continue hunting.

Explanation: