Question

Smokers impose negative externalities on nonsmokers. Suppose the airspace in a restaurant is a resource owned by the

restaurant owner.
a. How would the owner respond to the negative externality caused by smokers?
b. Suppose smokers own the airspace. How would that change matters?
c. If the government gives ownership of the air to nonsmokers, would that change matters? Explain your answer.
d. What does a ban on smoking in the restaurant do?

Answer 1

a. They wouldn’t allow smoking in the building because it would inflict on other customers in the building.
b. If the owners were smokers, they would allow others to smoke or smoke themselves since it is their property.
c. Yes it would because everyone has to listen to the government. They can file fines or other consequences to those who smoke under their ownership which will cause a decrease in smoking.
d. This allows pedestrians to not be harmed by the smoke caused by other smokers. This allows them to enjoy their time in the restaurant freely without worrying what’s getting into their lungs.