Question 17 Not yet answered disturbance and dust caused by each others\' vehicl

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Question 17 Not yet answered disturbance and dust caused by each others' vehicles. Each vehicle that is purchased by a resident cause Points out of 1.00 Residents of the town of Los Lobos (population 100) like to drive noisy offroad vehicles, but they hate the $10 worth of damage to each of the 100 residents. There are 10 residents who are willing to pay up to $3000 for an offroad vehicle. There are 40 residents who are willing to pay up to $2000 for an offroad vehicle and Flag question there are 50 residents who are willing to pay up to $1400 for an offroad vehicle. The price of offroad vehicles is $1300. In the absence of any governmental interferknce, how many residents of Los Lobos would buy offroad vehicles and how many people in Los Lobos would be better off if offroad vehicles were outlawed? Select one: a. 100 vehicles would be purchased and 80 residents would be better off if they were outlawed. O b. 50 vehicles would be purchased and nobody would be better off if they were outlawed. o c. 10 vehicles would be purchased and 90 residents would be better offif they were outlawecd. d. 100 vehicles would be purchased and 90 residents would be better offif they were outlawed e. 100 units would be purchased and all 100 residents would be better off if they were outlawed

Explanation / Answer

Option E is correct

Currently the price is $1300 and the all residents have a willingness to pay that is at least $1400. Hence all of the 100 residents will buy. Now each face a damage of $10 for 1 vehicle and so all will face a damage. If these vehicles are banned or outlawed, all of the residents will be benefitted. Hence option E is correct.

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