Assume Andy’s and Helen’s behavior at home is partially regulated by their condominium association, which acts as a small “voluntary government” for its residents. a) Per the Coase Theorem, how might the condominium association assign property rights across Andy and Helen so that a socially optimal level of radio playing is realized? Please explain how a particular assignment of rights would work towards achieving this goal. 3pt b)Your answer from Q3(a) should say something about the market for externalities that arises after an assignment of property rights. Use you answer from Q3(a), along with the information provided in Q1 and Q2, to model the market for externalities. How many hours of externalities are traded in this market when at equilibrium? Is the quantity socially optimal? Please provide a graph with your answer. 3pt c)Instead of assigning property rights, could the association use corrective taxes or subsidies to achieve a socially optimal level of radio playing? Explain.

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a To assign property rights across Andy and Helen so that a socially optimal level of radio playing is realized the condominium association can consider two scenarios 1 Assigning Property Rights to An... View the full answer