Question

externalities, then identity ty occurs on the demand/consumption side of the model or on the 1. Classify each of the following situations as positive or negative supply/production side of the model. a. A manufacturing plant spews toxic gas into the environment as a by-product of its pro- duction of furniture. b. A group of teenagers gather on Saturday to play loud music and congregate in a down- town park, making it difficult for other people in the town to enjoy the park c. A property owner fills his front yard with trash and old tires.

Answer 1

1.
a. Negative externality as it would affect the quality of air which reduces the quality of health. It affects the consumption side of the model
b. Negative externality as it would affect the quality of life and reduces consumption
c. Negative externality as it creates favorable atmosphere for spreading diseases which affects the consumption