Problem Set 3
7a) Why are vaccines an example of a positive externality? Explain. What are the marginal private
benefits and marginal social benefits?
Vaccines are an example of positive externality because they prevent an individual from getting
Problem set Two
1) Who ends up getting the limited supply of rent-controlled apartments in the NYC example?
Based on the readings I would assume that those with higher income end up getting
the the limited supply of rent-controlled apartme
Problem Set Ten
1. Suppose the government is proposing a new tax policy that gives recipients: zero
dollars for working zero hours; 50 cents for every dollar earned up to an annual income
of $20,000 so that a person earning
Externality: When the actions of one agent, affects the welfare of another agent and does so
outside of chances in market prices and quantities
Ex- Negative externality is air pollution caused by cars
Ex- Positive externality reduced crime rates associate
What do you think about policies intended to eliminate
unlawful discrimination and remedy historical unfairness? How has affirmative
action corrected inequalities? Is affirmative action a form of reverse discrimination?
Are there any ways affirmative acti