Assume that you live on the second floor of an apartment building and one day you forget to shut off the faucet in your bathtub. The bathtub overflows and floods your apartment and some of the water leaks through the floor and damages the apartment of your downstairs neighbor (the person who lives directly below your apartment. 

(a) Is the damage to your apartment a negative externality? Please explain. 

(b) Is the damage to your neighbor's apartment a negative externality? Please explain

Answer rating: 100% (QA)

a Yes the damage to your apartment can be considered a negative externality This is ... View the full answer