Question

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. A successful private negotiation should be possible where Peter values Jason keeping more bees, and the value to Peter is greater than the cost to Jason of acquiring more bees. A private negotiation should internalise the extermal benefts from Jason's bees.

Answer 1

c) C is the right answer as a negotiation can be worked out between both the parties if Peter gets higher value than the cost the cost incurred by Jason, which means that if Peter can offer Jason with an amount that is higher than the cost incurred by Jason and lower than the value received by Peter, then both of the paties shall be at a better off