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kaspx?homeworkld 463391113&iquestionld; 48flushed- Secure I https//www.matholconst EC 350 MyEconLab Spring 2018 Section 2 Homework: Chapter 4 Homework Score: 0 of 1 pt Critical Thinking 4.1 Save HW Score: 81.16%, 18.67 of 23 pts Question Help * 230123 (19complete) Celne shares a rented house with three other people. The house has a front yard that Celine is keen on converting into an attractive garden. However, she is aware that t would be difficult to exclude the other three people from enjoying the garden once t is provided Her friend Jennider suggests that Ceine should find out how much each of her roommates would want to pay for the garden. According to Jenniter, Celine should plant the garden only if the sum of the willingness to pay of all four o residents is equal to or exceeds the cost of planting the garden which of the follow ng·if true, would suggest that folosing Jennifer\'s idea would lead to a sub pinal outcome? O A. The tenancy agreement has a fixed term of one year O B. Celines roommates are under-reporting their true willingness to pay O C. Celine\'s willingness to pay for this house is higher than the rent she actually pays for it D. Celine\'s wilingness to pay exceeds that of her roommates 0 E. The garden maintenance costs are almost neglgble Cick to select your answer and then click Check Answer All parts showing Clear All Type here to search Esc F1 F2 F3 F4 F5 F6 F7

Solution

Celine\'s roomates are under reporting their true willingness to pay. This leads to suboptimal outcome. Because making a attractive garden is a public good for other three people. So, they under report their true willingness to pay because they can enjoy it anyway.