A hazelnut farm is next to a dairy farm. The hazelnut farmer sprays pesticides that are...

 

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A hazelnut farm is next to a dairy farm. The hazelnut farmer sprays pesticides that are harmful to the diary farm's livestock. The following table lays out the four scenarios, the costs and damages, and a column for social costs. The hazelnut farmer loses profit when it does not spray, and this is interpreted as their "cost" from not spraying. Fill in the Social Cost column for each action in the table below. Action Hazelnut farmer sprays, Dairy farmer does not move livestock Hazelnut farmer sprays, Dairy farmer moves livestock Hazelnut farmer does not spray, Dairy farmer does not move livestock Hazelnut farmer does not spray. Dairy farmer moves livestock Livestock Damage ($) 100 50 0 0 Dairy Farmer Cost ($) 25 25 Hazelnut Farmer Cost ($) 35 35 Total Social Cost ($) A hazelnut farm is next to a dairy farm. The hazelnut farmer sprays pesticides that are harmful to the diary farm's livestock. The following table lays out the four scenarios, the costs and damages, and a column for social costs. The hazelnut farmer loses profit when it does not spray, and this is interpreted as their "cost" from not spraying. Fill in the Social Cost column for each action in the table below. Action Hazelnut farmer sprays, Dairy farmer does not move livestock Hazelnut farmer sprays, Dairy farmer moves livestock Hazelnut farmer does not spray, Dairy farmer does not move livestock Hazelnut farmer does not spray. Dairy farmer moves livestock Livestock Damage ($) 100 50 0 0 Dairy Farmer Cost ($) 25 25 Hazelnut Farmer Cost ($) 35 35 Total Social Cost ($)

Answer rating: 100% (QA)

To fill in the Social Cost column for each action we need to consider the combined costs and damages ... View the full answer