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Consider the following scenario:
Suppose that a chicken farm uses a nearby stream to dispose of the wastes released by its
chickens. These wastes flow downstream into a lake that has become thick with algae and
polluted by the minerals in the waste matter. The local office of a nonprofit environmental
organization collects enough donations to fund a campaign to stop the farm's pollution.
Which of the following private solutions resolving the externality of pollution took place in this
scenario?
Moral codes and social sanctions
Charities
Contracts
Integration of different types of businesses through merger or acquisition
Keep in mind that sometimes private solutions to externalities are not achieved. For instance, this
could occur when communications barriers or social customs are important enough relative to
the potential gains involved that
- the market system has a crisis
- the government should never step in
- a private solution is not feasable

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Consider the following scenarioSuppose that a chicken farm uses.pdf

  • 1. Consider the following scenario: Suppose that a chicken farm uses a nearby stream to dispose of the wastes released by its chickens. These wastes flow downstream into a lake that has become thick with algae and polluted by the minerals in the waste matter. The local office of a nonprofit environmental organization collects enough donations to fund a campaign to stop the farm's pollution. Which of the following private solutions resolving the externality of pollution took place in this scenario? Moral codes and social sanctions Charities Contracts Integration of different types of businesses through merger or acquisition Keep in mind that sometimes private solutions to externalities are not achieved. For instance, this could occur when communications barriers or social customs are important enough relative to the potential gains involved that - the market system has a crisis - the government should never step in - a private solution is not feasable