Principles of Microeconomics, 7th Edition

Published by South-Western College
ISBN 10: 128516590X
ISBN 13: 978-1-28516-590-5

Chapter 10 - Part IV - Externalities - Problems and Applications - Page 213: 1

Answer

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Work Step by Step

The club makes it harder for the robber to pick up your vehicle, and when he takes your vehicle, he may have an incident with other car drivers on the lane. This is a negative externality, then. Whereas LoJack makes it easy for the police to locate the vehicle so that the other car owners are not disturbed by this robbery. This is a positive externality, then. Yes, this research may have political consequences. Policymakers should build policies on the auto theft security system and analyze their externalities and eventually integrate them into the legislation.
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