im paying up to 1k fg for people who answer this questions correctly.
if you can only answer one ill send you a portion still and so on.

please help if you can! thanks a lot


The following table shows the value of the pizza for Mike and Bill at a given time.
12:00 12:10 12:20 12:30 12:40 12:50
Mike 100 100 60 60 20 20
Bill 100 80 60 40 20 0
(1) Assume that Mike makes an offer at 12:00, 12:20, 12:40 and Bill makes an offer at 12:10, 12:30, 12:50. How would they divide the pizza through negotiation? You need to show the calculation process.
(2) If Bill makes an offer at 12:00, 12:20, 12:40 and Mike makes an offer at 12:10, 12:30, 12:50, what would be the result?


A horse ranch is located just next to a carrot farm. Horses often enter the farm and eat the carrots at night and cause a damage of $100. There are two ways to prevent the damage, building a fence around the farm at the cost of $150, or building a fence around the ranch at the cost of $180. TC= transaction cost
(1) When TC=0, what would be the resulting cost for the rancher and farmer after a negotiation when the court says it is the rancher’s responsibility? (Assume that they divide the gains equally in the negotiation.) What would be the resulting cost for the rancher and farmer after a negotiation when the court says it is the farmer’s responsibility?
(2) Now assume that TC=$10 whenever they negotiate. Who should be responsible in this case in order to maximize the social efficiency?



Kaka and Lala are neighbors. One day Kaka decides to raise 30 pigs in his house. Kaka makes $500 profit from the pigs. Naturally, the smell of the pigs bothers Lala very much and Lala sued Kaka. The pig smell gives $300 damage to Lala. This damage would be reduced to $100(=reduced by $200) if Kaka builds a ventilation system at a cost of $60. Obviously, if Kaka does not raise pig the smell will disappear completely. Lala cannot do anything about the smell. Assume that the judge is an expert on raising pigs and the TC=0 at the court. However there is a TC=$150 for Kaka and Lala to negotiate. Calculate the social cost for injunction to completely stop the pig smell and the social cost for damage sentence. Are the results socially efficient?

This post was edited by supmango on Oct 23 2013 04:56am