Question
No-till farmers control weeds by spraying synthetic chemicals. Some of the chemicals naturally drift about 30-50 feet onto nearby fields. Organic farmers can only sell
No-till farmers control weeds by spraying synthetic chemicals. Some of the chemicals naturally drift about 30-50 feet onto nearby fields. Organic farmers can only sell their produce as organic if there have been no synthetic chemicals applied, so organic farms suffer economic losses if chemicals from nearby no-till fields drift on to a portion of the organic fields.
a. (3 pts) What is the private cost of a no-till farmer spraying chemicals?
b. (3 pts) What is the external cost of a no-till farmer spraying chemicals?
c. (5 pts) What are two different ways to define property rights for spraying chemicals?
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