Brady owns a beachfront lot with a small house.During hurricanes,he refuses to leave and afterward he applies for government assistance to rebuild and files insurance claims for damages.By doing so,Brady is
A) increasing his economic surplus without harm to others.
B) imposing an external cost on himself.
C) imposing an external cost on rescue workers,taxpayers,and insurance policy holders.
D) treating his property as common property.
E) in a positional arms race.

Question

Quizplus · Accepted Answer

By refusing to leave and applying for government assistance and insurance claims, Brady is imposing an external cost on rescue workers, taxpayers, and insurance policy holders. This is because they will be the ones footing the bill for his decisions and actions, even though they had no say in the matter. Furthermore, Brady is putting himself and potentially others in danger by refusing to evacuate during a hurricane, which can increase the costs and risks associated with rescue efforts.

Brady Owns a Beachfront Lot with a Small House