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b . Your next - door neighbor likes to build bonfires in his backyard, and sparks often drift onto your house. A externality is present
b Your nextdoor neighbor likes to build bonfires in his backyard, and sparks often drift onto your house.
A externality is present in this example. The marginal social benefit of this activity is the marginal benefit to the individual. The marginal social cost of the activity is the marginal cost to the individual. Without intervention, there will be of this activity.
c Maija, who lives next to an apple orchard, decides to keep bees to produce honey.
A externality is present in this example. The marginal social benefit of this activity is the marginal benefit to the individual. The marginal social cost of the activity is the marginal cost to the individual. Without intervention, there will be of this activity.
d Justine buys a large SUV that consumes a lot of gasoline.
A externality is present in this example. The marginal social benefit of this activity is the marginal benefit to the individual. The marginal social cost of the activity is the marginal cost to the individual. Without intervention, there will be of this activity.
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