Question

9. Private solutions to correct for externalities Consider the following scenario:

1.) Suppose that a chicken farm uses a nearby stream to dispose of the wastes released by its chickens. These wastes flow downstream into a lake that has become thick with algae and polluted by the minerals in the waste matter. The local office of a nonprofit environmental organization collects enough donations to fund a campaign to stop the farm's pollution. Which of the following types of private solutions to the externality of pollution has occurred in this case?

Integration of different types of businesses through merger or acquisition

Charities

Moral codes and social sanctions

Contracts

2.) It's important to note that sometimes private solutions to externalities do not work. For example, this occurs when communications barriers or social customs are important enough relative to the potential gains involved that the market system has a crisis .

I need help with the second question!

Answer 1

Answer 2

Ans) the correct option is b) charities

The correct answer to the blank is coordinating negotiations among all of the parties too costly

Answer 3

Answer 4

The first answer is CHARITIES 

answer to blank is A PRIVATE SOLUTION IS NOT FEASIBLE