Principles of Microeconomics Externalities and COVID Question One Define the term negative externalities. Question Two Assume that during the summer I like nothing better than going out to my yard at 7:00 a.m. and using my leaf blower for two hours. Have I created a negative externality for anyone? Explain. Question Three Assume a pig farm opens up next door to me. In what sense is this a negative externality? How can I use the value of my house as a way of assigning a cost to that negative externality? Question Four One solution to a negative externality is for courts to say to me: you have the right to prevent the person from opening up a pig farm next to you but you can sell that right. Therefore, assume that I sell the right to the pig farm to open up a pig farm next to me for $800,000- and the pig farm agrees to pay that. (Assume I am the only one who will be negatively affected by the pig farm opening up.) In what sense is that result socially optimal? Question Five Before a vaccine for COVID was developed, why were there negative externalities associated with COVID? Be specific. Question Six Assume someone argued that they could handle the problem of externalities connected with COVID by doing what the pig farmer did: compensating the people who suffered a cost due to their negative externality. Why would that not have been possible? Question Seven The flu vaccine and the COVID vaccine have positive externalities. Define the term positive externality. Question Eight Why doesn't the shingles vaccine have positive externalities? Question Nine The social benefit of the COVID vaccine is the benefit that the person who gets the vaccine receives plus the external benefits that people receive when a person gets the vaccine. 1. Explain why if there were no external benefits that the private benefits and the social benefits would be equal