Suppose your neighbor likes to repair motorcycles in his front ...

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Suppose your neighbor likes to repair motorcycles in his front yard during evenings and on weekends, and he earns 400 per week from this work.
 
  However, the sight of piles of greasy motorcycle parts and the additional noise and traffic caused by his customers reduces your value of living in this neighborhood by 300 per week. If your neighbor has a right to operate this business, what is the efficient outcome? A) He continues to operate the business.
  B) You can pay him to move the business to another location.
  C) He pays you to let him continue working on motorcycles at his home.
  D) There is no efficient outcome from this situation.

Question 2

Which of the following are examples of cooperative games?
 
  A) The bargaining between a buyer and seller over the price of a car
  B) Independent action by two firms in a market regarding advertising strategies
  C) Independent pricing strategies by two firms in a market
  D) Independent pricing strategies by many firms in a market
  E) Team games (such as baseball or basketball)

[xMRAZ]

Answer to Question 1

A

Answer to Question 2

A