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Question

Question 3) In india, a drug used to treat sick cows is leadingto the death of many vultures that feed off of deat cattle. Beforethe decrease in the number of vultures, they sometimes used tosmash into engines of jets taking off from new delhi'sairports,posing a serious threat to air travelers.However,thedecline of the vultute populations of rats and feral dogs,which arenow the main scavengers of rutting meat. There have been calls fora ban on the drug used to threat the cows. Identify theexternalities that are present in the situation.Comment on theefficiency of banning the drug.How would you design anincentive-based regulation to attein an efficient outcome?

Solution

xxxxx are xxx externalities xx xxxx xxxx. A xxxxxxxx externalityis xxxx xxxxx xx a xxxxxxxx in xxxxxxxx xx xxxxx into xxxxxx and xxxxxxxxx xxxxxxxxxy xx the xxxxx increase xx xxxx xxx feral xxxxxxxxx mean xx xxxxxxxx xxxxxx a xxxxxxx spreading. xxx xxxyxxxxxxxxxy xx banning xxx drug xx xxxx xxx vulture xxxxxxxxxx wouldgo xx xxx xxxxx the xxxx and xxxx xxxxxxxxxx xx go xxxx, thusdecreasing xxx xxxxxx xxx a xxxxxxx to xxxxxx.xxxxx xxx xxxy ways xx design xxxxxxxxx xxxxx xxxxxxxxxxx.xxxxxyxxxxxx could xxxxxxxxx the xxxxxxxxx xxxxx xx drug xxxxx andthen xxxxxx xxxxxxxx xx sell xxx right xx xxx xxx drug xxx sickcows.

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