Principles of Microeconomics (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971493
Author: N. Gregory Mankiw
Publisher: Cengage Learning
Question
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Chapter 10, Problem 6PA

Sub part (a):

To determine

Externality.

Sub part (b):

To determine

Externality.

Sub part (c):

To determine

Externality.

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John loves playing country music at high volume. Mike loves opera but hates country music. Unfortunately, they are next-door neighbors in an apartment building with paper-thin walls. a. What is the negative externality in this situation? b. What command-and-control policy might the landlord impose? c. Could a command-and-control policy cause an inefficient outcome?d. Suppose the landlord lets the tenants do whatever they want. Using the Coase theorem, how might John and Mike reach an efficient outcome on their own?
Which of the following generate the type of externality previously described? Check all that apply. The city where you live has granted a permit to put a movie theater in your neighborhood, causing traffic jams at night and on weekends. A microbiology lab has published its breakthrough in swine flu research. Your roommate, Lucia, has bought a puppy that barks all day while you are trying to study economics. Eric has planted several trees in his backyard that increase the beauty of the neighborhood, especially during the fall foliage season.
Suppose that you put an invisible tracking device on your computer that will instantly lead police to it if your computer is ever stolen. Does your purchase of the tracking device provide a positive or negative externality? What kind of externality do you provide when you purchase a visible computer lock in order to prevent theft?
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