Q What if I don't like purple? Externalities- Coase, Command, and Control The Advanced Explanation Links below make up the "core" of Market Failure-Externalities. Review the links and construct a post on the following: Externalities are identified as the market either underproduces or overproduces items for failure to properly identify "external" costs and benefits. The applications of Tax or Subsidy, Regulation, or Coase Theory "corrects" the market and move output from an "equilibrium" status to an "optimal" status. Post your response to the following: In addressing the externality, why is the good or service over underproduced or overproduced? How does the application of Tax or Subsidy, Regulation, or Coase correct this problem? In each of the following, a Negative Externality is being thrust upon external individuals. In each situation, there are no legal codes or actions to prohibit these actions: Construct and post a solution on one of the following: Barking Dog- You live in a rural area where there are no laws to protect the right to peace and quit. Your neighbor who lives a short distance away, get a dog that barks non-stop. The neighbor loves the dog to a value of $500. The Barking imposes a cost of $800 upon you for loss of sleep. The Mansion Next Door- As a Hollywood star you have purchased a home in a suburban community near the ocean and would like to "re-build" the home into a 5 story mansion. The people around you will lose their view of the ocean, but you will have a fantastic home. Local zoning ordinances protect the property rights of your neighbors land and view. How will you get your home built? The Purple Passion- Your next door neighbor is unloading gallons and gallons of Bright Purple paint in their driveway and has announced that his "Entire home will be a Purple Palace." You call the City Planning Commissions and find that there are CC&R (Covenants, Conditions and Restrictions) which limit (to a very limited pallette of colors NOT including Purple) paint colors that can be used to paint a home . Explain the regulation to your neighbor on why they CANNOT paint their home Purple. Negative Externality - Demand Negative Externality - Supply Students should review the following links for support: • B.4.2.3 Advanced Explanation-Externalities • B.4.2.7 Advanced Explanation-Externalities-Solutions- Tax-Regulate-Coase Discussion Question Requirements: Each student is required to post a 150 word response to the question. The student then must post at least a 50 word response to at lease ONE other student post. Post-=4 points. Comment = 2 Points Submit Original Post by the Due Date. Comments are open for four (4) days after the Due Date or until the Available Until Date How to Participate and Answer Discussion Questions