Many Negative Externalities Exist In Cities

Many negative externalities exist in cities. For example, a high concentration of automobile traffic incities generates pollution and causes congestion, and both pollution and congestion are negative externalities.When a particular person decides to drive a car in a city on a given day, he or she does not take into accountthe negative effects that driving his or her car has in terms of pollution and deterring other drivers fromreaching their destinations (congestion). Although negative externalities (including pollution and congestion)appear to abound in cities, people still prefer to live in cities (other wise they would not exist). In economicterms, discuss the forces that cause people to prefer life in the city. How do these forces relate to whethermarket outcomes are economically efficient?

Many negative externalities exist in cities. For example, a high concentration of automobiletraffic in cities generates pollution and causes congestion, and both pollution and congestion are…

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