HW Q 3.(v) Consider the case of provinces constructing dams in the north of India.. (a) Does an externality exist? If so, classify the externality as 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 possible/reasonably feasible to assign property rights and solve the problem?). Provide a reasoning for your assessment. (d) If an externality exists and the Coase theorem does not apply, discuss a government or institutional solution that can mitigate the problem of externality. Provide a reasoning for your assessment.

HW Q 3.(v) Consider the case of provinces constructing dams in the north of India.. (a) Does an externality exist? If so, classify the externality as 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 possible/reasonably feasible to assign property rights and solve the problem?). Provide a reasoning for your assessment. (d) If an externality exists and the Coase theorem does not apply, discuss a government or institutional solution that can mitigate the problem of externality. Provide a reasoning for your assessment.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter17: Capital And Time

Section: Chapter Questions

Problem 17.11P

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