Question

Pollution is a a. problem that cannot be remedied with regulations or corrective taxes. b. problem that is entirely unrelated to the parable called the Tragedy of the Commons. c. negative externality that can be viewed as a common-resource problem. d. negative externality that can be viewed as a public-goods problem.

Answer 1

Step-by-step explanation:

Externality is a microeconomic concept that aims to explain the positive or negative impact that an economic activity has on third parties. If by exercising an economic activity, a company indirectly benefits society or community, the externality is positive. If economic activity negatively impacts the surrounding community, externality is said to be negative. For example, the pollution that an industry emits in the production process has deleterious effects throughout society, being a negative externality.

Pollution as a negative externality can be classified within the scope of common resource problems. A common resource is a resource to which everyone has access without control. For example, atmospheric air is a common resource for all. When an agent pollutes this resource, it causes a negative externality, leaving everyone worse off than before the pollution.