Alberta owns a nature preserve next to a coal mine. The mine produces dust that enters a stream on its land, which later flows through Alberta's land. The dust in the stream does about $20,000 of damage to Alberta's plants per year. The mine can clean up the dust before it reaches the stream for about $12,000 per year. Alberta offers them $15,000 per year to clean up the dust. What economic idea does this scenario exemplify and why?

Alberta owns a nature preserve next to a coal mine. The mine produces dust that enters a stream on its land, which later flows through Alberta's land. The dust in the stream does about $20,000 of damage to Alberta's plants per year. The mine can clean up the dust before it reaches the stream for about $12,000 per year. Alberta offers them $15,000 per year to clean up the dust. What economic idea does this scenario exemplify and why?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter13: Positive Externalities And Public Goods

Section: Chapter Questions

Problem 22CTQ: Radio stations, tornado sirens, light houses, and street lights are all public goods in that all are...

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