What is the cost of cooking dinner for one person?
• 1. Very low, if it means nine people instead of eight. • 2. Pretty high (in labor) if it means one person instead of none. • C. Two hunters in the woods. If either or both shoot the third, he is dead. • 1. So the marginal cost imposed by B shooting C (given that A was already doing so) is zero. • 2. As is the marginal cost of A shooting C (given that B was doing so) • 3. But the cost of A and B shooting C is one life. • 4. The marginals don’t add up to the total. • D. Two drivers–takes two to tangle. • 1. There are only two drivers in the world. • 2. If A drives and B doesn’t, or B does and A doesn’t, or neither does, zero collision cost. • 3. If both drive, $100 expected accident cost. • 4. So the marginal cost of one more driver (two instead of one) is $100–whichever driver it is. • II. Ex Ante, ex Post: • A. Consider two different approaches to preventing auto accidents: • 1. Ex Ante–laws against speeding, required brake inspections, laws against DUI, etc. • 2. Ex Post–tort li
