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A way to resolve the negative externality problem is to simply tax the producer the amount of the negative externality. What is another way? Please explain in detail.

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Joshua Stredder
Joshua StredderLv10
28 Sep 2019

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Related questions

What is an externality? Can you give an example of a positive externality and another of a negative externality? In what way does the patent system help society solve an externality problem?

Externalities are costs or benefits that are caused by producing or consuming a good but that are not included in the market price for the good. They are simply the unintended side effects of market activities. Externalities can be positive or negative. One example of a positive externality might be when beekeepers provide a means of pollination for fruit growers. Air, water, and noise pollution are examples of negative externalities.

Please answer the following questions to describe an instance in which you, an acquaintance, or family member has experienced an externality. Please use economic concepts, and use references in your main contribution.

How did it affect you (or your acquaintance or family member?) Please explain.

What were the effects? Please explain.

Did you (or your acquaintance or family member) experience increased or decreased health or quality of life? Please explain.

If you choose to write about a negative externality such as pollution, what do you think is the best way to reduce pollution? Please explain.

If you choose to write about a positive externality, what is the economic problem that positive externalities create? How would you resolve that? Please explain.

1)Why does a tax on a product that has a negative externality help get the market closer to the social optimum?How does the tax change the behavior of the consumer or producer?

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