7. Beverly owns a rabbit and receives a $600 benefit from owning it. Sometimes Beverly's rabbit makes its way onto the lawn of her neighbor, Charles, and eats the vegetables in Charles' garden. This intrusion by the rabbit costs Charles $400. a. Can both individuals become better off if Charles pays Beverly some amount of money to get rid of the rabbit? Explain. b. Now assume that the government changes the regulations on owning a domestic animal and if anyone can force neighbors to give up their animals. (this is the case for some animals for example rooster). Can both individuals become better off if Beverly pays Charles some amount of money to keep the rabbit?

7. Beverly owns a rabbit and receives a $600 benefit from owning it. Sometimes Beverly's rabbit makes its way onto the lawn of her neighbor, Charles, and eats the vegetables in Charles' garden. This intrusion by the rabbit costs Charles $400. a. Can both individuals become better off if Charles pays Beverly some amount of money to get rid of the rabbit? Explain. b. Now assume that the government changes the regulations on owning a domestic animal and if anyone can force neighbors to give up their animals. (this is the case for some animals for example rooster). Can both individuals become better off if Beverly pays Charles some amount of money to keep the rabbit?

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 1PA

See similar textbooks

Similar questions

7. The free rider problem refers to people whoa. will only consume a public good if it is free.b. for efficiency’s sake, should be allowed to consume public goods (such as mass transit) even if they do not pay.c. will not voluntarily pay for a public good even though they would benefit from its provision.d. are not willing to pay for a public good because they lack information about its potential benefits.
Suppose you choose to plant flowers that attract pollenating animals, such as bees and humming birds, to your yard. By planting these flowers you are creating a 1 uncompensated benefit 2uncompensated harm 3market exchange 4 public good
1. Choose one of the approaches listed below for protecting elephants from poachers in African countries. A. The government sets up enormous national parks that have sufficient habitat for elephants to thrive and forbids all local people to enter the parks or to injure either the elephants or their habitat in any way. B. The government sets up national parks and designates ten villages around the park's edges as official tourist centers that become places where tourists can stay and bases for guided tours inside the national park. 2. Depending on the approach you have chosen (A or B), explain how the incentives will affect the local villagers, who are often very poor. 3. Which approach (A or B) seems more likely to help the elephant population?4. Discuss the practice of poaching elephants and the need for environmental protection? 5. Explain how the practice of poaching elephants is a negative externality?
1. A construction company provides free first-aid and CPR training to all employees in order to save money on liability insurance. This free training might be an example of a ______ because ______. (Both the example and the explanation must be correct.) - Rival good because every time someone learns CPR, another person must forget CPR. - Source of a negative externality because employees are probably bored during the training. - Source of a positive externality because employees may go on to save the lives of others, even outside the company. 2.The Coase theorem states that interested parties will negotiate to correct externalities if two assumptions are met. What are those two assumptions? All parties agree on the value of the externality. AND Parties have mutual respect for each other. Public good because non-employees were prevented from receiving the free training. No barriers to negotiation. AND All parties agree on the value of the externality. No…
1. What is market failure? Explain in your own words. 2. Why do markets fail. List two reasons and explain them in your own words. 3. Explain what an external effect (also known as an externality) is in your own words. 4. List four examples of externalities 5. Explain what a social dilemma is and list one example of a current social dilemma.
Which categories of goods are rival in consumption?a. private goods and club goodsb. private goods and common resourcesc. public goods and club goodsd. public goods and common resources
1. What is an example of a good that has become a public (or quasi-public) good due to technology? 2. Explain how technology has made this good non-rival in consumption or non-excludable. 3. Is there a free rider problem in the good you mentioned? How can the free rider problem be addressed in that example?
Spring is here, and Manuel and his grandfather would like to go fishing for the weekend in Florida. Manuel could either go to the lake in town where anyone can fish without a permit, or he could drive up to a pond located on his family's property in the countryside to fish. Assume that, no matter where people fish, all of the fish that are caught would be kept (that is, there is no "catch and release" policy). The fish in the lake are considered and whereas the fish in the private pond are and . In other words, the fish in the lake are an example of , and the fish in the private pond are an example of . Fishing in the lake will likely lead to because of which of the following reasons? Nobody will enjoy fishing because of the lack of private contributions to the maintenance of the lake. Anyone can fish in the lake, and one person's fishing activity decreases the ability of someone else to fish with success. All fishermen will…
Tell whether each of the following goods is best characterized as (1) a private good; (2) a public good; (3) an open-access resource; or (4) a club good. briefly explain (a) A video game (b) Clean water (swimmable, fishable, drinkable) (c) Landscaping at a public university (d) News website (e) An electric utility (F) National defense (g) A laptop computer