Consider a factory, located in the middle of nowhere, producing a nasty smell. As long as no one is around toexperience the unpleasant odor, are any externalities produced? Suppose that there was family next door to the smelly factory. Do we now have an externalities problem?Suppose that the family clearly possesses the right to a pleasant-smelling environment. Does this mean thatthe factory will be required to stop producing the bad smell? What can be a private solution to this problem?
Consider a factory, located in the middle of nowhere, producing a nasty smell. As long as no one is around toexperience the unpleasant odor, are any externalities produced? Suppose that there was family next door to the smelly factory. Do we now have an externalities problem?Suppose that the family clearly possesses the right to a pleasant-smelling environment. Does this mean thatthe factory will be required to stop producing the bad smell? What can be a private solution to this problem?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter12: Environmental Protection And Negative Externalities
Section: Chapter Questions
Problem 44P: In the Land of Purity, there is only one form of pollution, called gunk. Table 12.14 shows possible...
Related questions
Question
Consider a factory, located in the middle of nowhere, producing a nasty smell. As long as no one is around to
experience the unpleasant odor, are any externalities produced?
Suppose that there was family next door to the smelly factory. Do we now have an externalities problem?
Suppose that the family clearly possesses the right to a pleasant-smelling environment. Does this mean that
the factory will be required to stop producing the bad smell? What can be a private solution to this problem?
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