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Answer the following two questions for each of the following examples:
(i) smoking by individuals;
(ii) toxic waste production by firms;
(iii) research and development by a high-tech firm; and
(iv) 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?
Locate-by searching the Internet-federal
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