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.
Chapter1: Making Economics Decisions
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![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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F36d93af9-1c60-4c54-a265-7600bbfc6b68%2F14d0f4a2-7faa-49f4-ad7f-d5d2f6cf1ed6%2Fjyqxg7_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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.
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