What is the definition of a negative externality

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Question: What is the definition of a negative externality? Give an example not from lecture. 2. Rabbits are everywhere! They are destroying gardens, but many people find them to be cute. (a) Suppose that there are six prospective rabbit owners, each of whom can adopt one rabbit for free. Each prospective rabbit owner derives 4 units of utility from having a rabbit, and none have gardens. How many rabbits will prevail if prospective rabbit owners can freely adopt rabbits? (b) Suppose that we care about the total utility of the six rabbit owners given in part (a), minus the total cost of garden repairs, which equals c(r) = 1 3 r3 for r rabbits. How many rabbits should we allow to be adopted? (c) What general economic concept from lecture does this silly example illustrate? 3. There were 275,924,442 vehicles registered in the United States in 2020. (a) Give an example of an externality associated with an additional driver on a congested road. (b) How can tolls help alleviate this externality? When will a toll booth be Pareto efficient? (c) How should the toll be set? (d) Some cities (e.g., Beijing during the 2008 Olympics) restrict the total quantity of cars,

Reference no: EM133575321

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