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When assigning property rights, do consumers care about who gets the property rights? (assume quasilinear preferences)...

When assigning property rights, do consumers care about who gets the property rights? (assume quasilinear preferences)

A. Yes because it affects an individual's well-being.
B. No because it results in the same amount of externality.

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Answer #1

B. No because it results in the same amount of externality.


If the preferences are quasilinear, then every efficient solution must have the same amount of the externality. Thus, option B is correct.

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