Short Answer Questions (40 points=10 points per question) 10 points)The Coase Theorem Firm Swim Club MB (polluter) MC (pollutee) A F B E C D Q* Zero pollution Water Pollution Full pollution A firm pollutes a local river and causes damage to a swim club downstream. In the figure above, the line MB represents the firms Marginal Benefit from polluting and the line MC represents the Marginal Cost of the pollution damages to swimmers. State your answers to each of the following questions in terms of the areas A, B, C, D, E, and F. 1). If the swim club is given the property right to the river, what area represents the minimum total payment the swim club would be willing to accept to allow the firm to pollute the river to the efficient level? And what area represents the maximum total payment that the firm would be willing to pay to pollute the river to the efficient level? 2). If the firm has the property right to pollute the water, what area represents the minimum total payment the firm would be willing to accept to reduce water pollution to the efficient level? 3). In light of the properties necessary for the Coase Theorem to hold, would you expect an efficient outcome to be more likely when property rights were given to the swim club or firm? And why