Consider the case of: Buying a car with added safety features that prevent the drivers and passengers’ deaths in the event of an accident (a) Does an externality exist? If so, is it positive/negative (or both) (b) Use Coase’s framework to identify the cause of the externality (c) If an externality exists, determine whether the Coase theorem applies (i.e. is it feasible to assign property rights and solve the problem?) (d) If an externality exists and the Coase theorem does not apply, discuss a government/institutional solution that can mitigate the problem of externality

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