Frank and Bill are eating lunch together at Chipotle. Frank has a burrito. Frank gets enjoymentfrom how quickly he can eat his burrito. The faster the better. But, the faster Frank eats hisburrito the more sound he makes, which really annoys Bill. If Frank was free to do whatever hewants, without thinking about Bill, then Frank will000too fast so that collectively Bill and Frank would be better off if he ate slower.eat his burrito at a speed where the additional benefit from eating faster equals zero.eat his burrito at a speed where his additional benefit is exactly offset by Bill's additionalirritation at the sound.eat his burrito too fast unless there is some sort of tax on his eating speed.

Externality refers to the situation in which the act of producer or consumer affects the third party…

Frank and Bill are eating lunch together at Chipotle. Frank has a burrito. Frank gets enjoyment from how quickly he can eat his burrito. The faster the better. But, the faster Frank eats his burrito the more sound he makes, which really annoys Bill. If Frank was free to do whatever he wants, without thinking about Bill, then Frank will too fast so that collectively Bill and Frank would be better off if he ate slower. eat his burrito at a speed where the additional benefit from eating faster equals zero. eat his burrito at a speed where his additional benefit is exactly offset by Bill's additional irritation at the sound. eat his burrito too fast unless there is some sort of tax on his eating speed.

Frank and Bill are eating lunch together at Chipotle. Frank has a burrito. Frank gets enjoyment from how quickly he can eat his burrito. The faster the better. But, the faster Frank eats his burrito the more sound he makes, which really annoys Bill. If Frank was free to do whatever he wants, without thinking about Bill, then Frank will too fast so that collectively Bill and Frank would be better off if he ate slower. eat his burrito at a speed where the additional benefit from eating faster equals zero. eat his burrito at a speed where his additional benefit is exactly offset by Bill's additional irritation at the sound. eat his burrito too fast unless there is some sort of tax on his eating speed.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter1: The Role And Method Of Economics

Section: Chapter Questions

Problem 9P

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