Economics (6th Edition)
Economics (6th Edition)
6th Edition
ISBN: 9780134105840
Author: R. Glenn Hubbard, Anthony Patrick O'Brien
Publisher: PEARSON
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Chapter 5, Problem 5.2.6PA
To determine

The marginal cost and marginal benefit for reducing crime.

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Briefly explain what is meant by the term "externality" and how it occurs. What are some ways (name at least 2) in which a negative externality can be corrected?
In an article in the agriculture magazine Choices​, Oregon State University economist JunJie Wu made the following observation about the conversion of farmland to urban​ development:   Land use provides many economic and social​ benefits, but often comes at a substantial cost to the environment. Although most economic costs are figured into land use​ decisions, most environmental externalities are not. These environmental​ "externalities" cause a divergence between private and social costs for some land​ uses, leading to an inefficient land allocation. For​ example, developers may not bear all the environmental and infrastructural costs generated by their projects. Such​ "market failures" provide a justification for private conservation efforts and public land use planning and regulation.   What does the author mean by market failures and inefficient land use allocation​? Explain why the author describes inefficient land allocation as a market failure. Illustrate your argument with a…
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