Land on both sides of the border of Brazil and Venezuela has long been occupied by the Yanomamo people.These "fierce people" are the last Stone Age tribe left in South America.Following discovery of gold, approximately 45,000 garimperios (gold miners) invaded the Yanomamo territory.The mining process pollutes the rivers and scares away game, so traditional Yanomamo sources of food, are almost impossible to find now.The Yanomamo are starving.Economists call this problem

Question

Quizplus · Accepted Answer

The invasion of the Yanomamo territory by gold miners and the resulting pollution and scarcity of food resources can be categorized as an externality. This is because the actions of the miners have negative effects on the Yanomamo people, who are not a part of the market for gold mining and have no say in the matter. The cost of the pollution and loss of traditional food sources are not reflected in the market price of gold, and thus the miners do not bear the full cost of their actions.

Land on Both Sides of the Border of Brazil and Venezuela