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Externality to be internalized

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Reference no: EM132320279

Answer questions (a) and (b) for each of the following four examples:

  1. Smoking by individuals;
  2. Toxic waste production by firms;
  3. R&D by a high-tech firm; and
  4. Individual vaccination against communicable illness.

(a) Is there an externality? If so, describe it, including references to whether it is positive or negative, and whether it is a consumption or production externality.

(b) If there is an externality, does it seem likely that private markets will arise that allow this externality to be internalized? Why or why not?

Reference no: EM132320279

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