Some people might argue that the reason the government has to manage cost and benefit externalities is because of the “Common Pool Problem.” Explain the reasoning of that statement. Do you agree or disagree? Explain why. The price of food has seen a rapid increase in the past several months, especially in the US where demand has leveled off, and in fact may have even begun to drop. With demand subsiding, why does the price continue to go up? Does the price of food fit standard supply and demand model? Use the concepts of supply and demand from the reading assignment to express your responses. You may also use other markets other than the US to make your point.

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Some people might argue that the reason the government has to manage cost and benefit externalities is because of the “Common Pool Problem.” Explain the reasoning of that statement. Do you agree or disagree? Explain why.

The price of food has seen a rapid increase in the past several months, especially in the US where demand has leveled off, and in fact may have even begun to drop. With demand subsiding, why does the price continue to go up? Does the price of food fit standard supply and demand model? Use the concepts of supply and demand from the reading assignment to express your responses. You may also use other markets other than the US to make your point.

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