Question

Please help me in both questions, thank you very much :)

QUESTION 7 Jason is a beekeeper. He keeps bees to produce honey and bees wax candles. Peter is a farmer whose farm is next to where Jason keeps his bees. Bees assist in pollinating crops Which of the following statements are true: A private negotiation should not be hindered by negotiation costs if Jason and Peter can come to an agreement by just talking to one another A private negotiation is hindered by the fact that it is unclear who has the property rights. more bees, and the value to Peter is greater than the cost to Jason of acquiring more OA successful private negotiation should be possible where Peter values Jason keeping bees A private negotiation should internalise the external benefits from Jason's bees.

Answer 1

7) in the question it has not been mentioned that who has rights over which property that means here property rights are not being clearly defined so a private negotiation is hindered by the fact that its unclear who has the property rights.

9) if the tree is being chopped then gains to dan will be more as mentioned in the above table because it was creating negative externality for dan. the extra gain dan has from cutting down the tree is 401 so if dan gives 200 to lachlan both will get half of the total extra gains from chopping down the tree.