Answer the following two questions for each of the following examples: (i) smoking by individuals; (ii) toxic waste production by firms; (iii) research and development by a high-tech firm; and (iv) individual vaccination against communicable illness.
a. Is there an externality? If so, describe it, including references to whether it is positive or negative, and whether it is a consumption or production externality.
b. If there is an externality, does it seem likely that private markets will arise that allow this externality to be internalized? Why or why not?