Author Question: Dina is driving to work on an interstate highway at 90 MPH, well in excess of the legal speed of 65 ... (Read 30 times)

fbq8i · **on:** Jun 30, 2018

Dina is driving to work on an interstate highway at 90 MPH, well in excess of the legal speed of 65 MPH. Sandy is also driving to work at the same time, going 85 MPH. A state trooper pulls Dina over and gives her a speeding ticket. Sandy continues driving, but if Dina had not been speeding, the trooper would have ticketed Sandy instead. In terms of externalities, this story shows that:
a. Sandy's actions gave Dina a positive externality.
b. Dina's actions gave Sandy a positive externality.
c. Sandy's actions gave Dina a negative externality.
d. Dina's actions gave Sandy a negative externality.
e. Dina's and Sandy's actions did not create any externalities.

Question 2

Pete throws leftover bread onto his front lawn because he enjoys watching the pigeons feeding. His neighbor John is not happy about the pigeons, since they leave a mess on his property. This is an example of:
a. a negative externality.
b. a public good.
c. privatization.
d. third-party benefits.
e. well-defined property rights.