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Chapter 10 HMWK

This is generally a very interesting chapter for everyone.  What is an  example of a negative externality that interests you?  Could the problem be solved via negotiation (Coase Theorem)?  Why or why not? Do you favor regulation to solve this externality?  Why or why not?  
(Don't respond "pollution".  Be specific.  What type of pollution, caused by what. There are many examples of externalities beyond "pollution" and of course many many types of pollution.)
Would you regulate your example via a tax or via a rule?  Why do you prefer one solution over the other?




An example of a negative externality are cargo ships that pollute the ocean and endanger marine life. Nobody owns the ocean so it would be difficult to sue them, but everyone who lives along the shore or who wants to enjoy eating seafood is negatively affected without being compensated. It would be very difficult for the shipping companies to bargain with large populations over many geographic areas, so it would be easier to use regulation to solve this externality. Perhaps requiring shipping routes to be so many miles away from shore as well as selling permits to pollute would help balance the impact.

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