What are two ways to protect your car from theft. The Club (a steering wheel lock) makes it difficult for a car thief to take your car. Lojack (a tracking system) makes it easier for the police to catch the car thief who has stolen it. Which of these types of protection conveys a negative externality on other car owners? Which conveys a positive externality? Do you think there are any policy implications of your analysis?

What are two ways to protect your car from theft. The Club (a steering wheel lock) makes it difficult for a car thief to take your car. Lojack (a tracking system) makes it easier for the police to catch the car thief who has stolen it. Which of these types of protection conveys a negative externality on other car owners? Which conveys a positive externality? Do you think there are any policy implications of your analysis?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter10: Externalities

Section: Chapter Questions

Problem 1PA

See similar textbooks

Similar questions

How is the increase in post-secondary education (e.g. positive externality) going to effect consumer behavior in the future?
Imagine that a town of 200 people is trying to decide whether to pay for mosquito control. The town has surveyed their citizens and they each say they value mosquito control at $75. Mosquito control only costs $2,500 so the town goes ahead and pays for the service. When the town asks for donations to pay for the mosquito control, they only receive $1,000. What does this result show? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a The town's citizens were free riders. b The mosquito control suffered from the tragedy of commons. The mosquito control cost must have been greater than its economic benefit. d. The town's survey must have overestimated the value of mosquito control.
What public policy approach would be most reasonable to protect consumers from harmful products? How might market and economic forces play a role in protecting consumers?
Smoking imposes externalities on non-smokers, but non-smokers can also impose externalities on smokers. Is this statement true or false? Why or why not?
During the time of a pandemic and the existence of a highly contagious corona-virus, many scientists recommended wearing a mask. Let's assume that wearing a mask can limit the spread of the virus. Is wearing a mask an externality? Positive or negative? How about not wearing a mask? Explain your answers.
Identify at least one positive and negative externality from running a hamburger shop. What is one example of how an externality could affect the price of your hamburger?
The National Flood Insurance Program (NFIP) provides flood insurance for homeowners and small businesses. The policyholders pay just 10% of the actual cost of flood insurance. When such highly-subsidized insurance is available, people are more likely to build homes in areas subject to sever flood damage. What is this behavior is called? a. Negative externality b. Positive externality c. Adverse selection d. Moral hazard
What is the principal question Coase posits when it comes to negative externalities? Who should be allowed to inflict harm on whom? Who is morally correct in any given argument about harm? How large is the harm caused?
Historically, Vaccinations have prevented the spread of certain diseases such as chicken pox or megningtis. What type of externality takes place with the consumption of such vaccines. Explain with words and a graph.
Are negative externalities considered on a microeconomics analysis? Why or why not?
Which of the following is a negative externality connected to attending college? A) The fact that completion of a college degree acts as a signaling mechanism to employers. B) The fact that other costs, such as books and materials, are incurred in addition to tuition and fees. C) The fact that your college has required that all individuals living in student housing either get or show they have already obtained vaccinations against all communicable diseases. D) The fact that the people in the next room play loud music at hours you want to sleep. E) The fact that you will get benefits from college that you don't currently anticipate.
An externality arises when a firm or person engages in an activity that affects the wellbeing of a third party, yet neither pays nor receives any compensation for that effect. If the impact on the third party is adverse, it is called a externality. The following graph shows the demand and supply curves for a good with this type of externality. The dashed drop lines on the graph reflect the market equilibrium price and quantity for this good. Adjust one or both of the curves to refiect the presence of the externality. If the social cost of producing the good is not equal to the private cost, then you should drag the supply curve to reflect the social costs of producing the good; similarly, if the social value of producing the good is not equal to the private value, then you should drag the demand curve to reflect the social value of consuming the good. -O- Supply Demand Supply Demand QUANTITY (Unts) With this type of externality, in the absence of government intervention, the market…