AGEC 315 - HW6 Graded A+
New firms focused on "natural" foods enter the market for processed food and traditional firms lose
customers and eventually shut down. Does this scenario represent an externality? ️No
Farmer A is mad at farmer B for being so efficient, so farmer A lights a match to...
New firms focused on "natural" foods enter the market for processed food and traditional firms lose
customers and eventually shut down. Does this scenario represent an externality? ✔️No
Farmer A is mad at farmer B for being so efficient, so farmer A lights a match to farmer B's field. Does
this scenario represent an externality? ✔️No
Some farmers have not applied the recommended amount of herbicide (a chemical to kill weeds). This
has created superweeds that are resistant to the herbicide and these superweeds spread to the fields of
other farmers. Does this scenario represent an externality? ✔️Yes
Bees provide two main benefits: (1) producing honey and (2) pollinating crops. Fruit producers in
California pay beekeepers to place their beehives in the fruit fields to pollinate the crop. Does the use of
bees to pollinate crops represent a positive externality in this scenario? ✔️No, it is not an externality
A person maintains a beautiful lawn. This increases the value of the person's home as well as the value
of other homes in the neighborhood. Does this scenario represent an externality? ✔️Yes
A farmer applies fertilizer on her field and after a heavy rainfall some of the fertilizer is lost from the
field and enters the nearby reservoir. Does this scenario represent an externality? ✔️Yes
An organic farmer has a field next to a no-till farmer. Some of the chemicals used by the no-till farmer
drift onto the organic farmer's field and he can only sell a portion of his field as certified organic. Does
this scenario represent an externality? ✔️Yes, it is an externality
The housing crisis of 2008 caused investors to seek new investment opportunities. They invested
substantial amounts in agricultural land which increased agricultural land values and made it more
difficult for young farmers to be able to purchase land. Does this scenario represent an externality?
✔️No, it is not an externality
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