# Roberto and Thomas live in a university hall of residence. Reberto values playing loud music at a value of €100. Thomas values peace and quiet at a value of €150. Which of the following statements is true about an efficient solution to this externality problem if Roberto has the right to play loud music and if there are no transaction costs ? with Answer - Economics Mcqs | TestPrep

> Solved MCQ: Roberto and Thomas live in a university hall of residence. Reberto values playing loud music at a value of €100. Thomas values peace and quiet at a value of €150. Which of the following statements is true about an efficient solution to this externality problem if Roberto has the right to play loud music and if there are no transaction costs ? Correct Answer: C. Thomas will pay Roberto between €100 and €150 and Roberto will stop playing loud music. Verified answer explanation for FPSC, PPSC, MDCAT, NTS, and CSS competitive exam preparation.

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# Roberto and Thomas live in a university hall of residence. Reberto values playing loud music at a value of €100. Thomas values peace and quiet at a value of €150. Which of the following statements is true about an efficient solution to this externality problem if Roberto has the right to play loud music and if there are no transaction costs ?

Direct Answer & Quick Reference

The correct option is **C. Thomas will pay Roberto between €100 and €150 and Roberto will stop playing loud music**.

A. Thomas will pay Roberto between €100 and €150 and Roberto will continue to play loud music

B. Roberto will pay Thomas €150 and Roberto will continue to play loud music

C. Thomas will pay Roberto between €100 and €150 and Roberto will stop playing loud music **(Correct Answer)**

D. Roberto will pay Thomas €100 and Roberto will stop playing loud music

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Verified Key: C. Thomas will pay Roberto between €100 and €150 and Roberto will stop playing loud music
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