Dee loves to landscape her yard, but her neighbor Marvin places a low value on his landscaping. When Marvin's grass is neglected and gets long, Dee will mow it for Marvin. This is an example of

Question

Quizplus · Accepted Answer

This is an example of a private solution to a negative externality problem. Marvin's neglected lawn is a negative externality that affects Dee's enjoyment of her own lawn. By mowing Marvin's lawn, Dee is addressing the externality directly without involving any government intervention. The Coase theorem is not applicable here because it assumes that parties can negotiate and allocate property rights, which is not the case in this scenario.

Dee Loves to Landscape Her Yard, but Her Neighbor Marvin