This scenario pertains to microeconomics course-externalities focusing on Noise Pollution, which has negative effects on human health. As some scientific studies have shown, community members who are residing around airports have been exposed to frequent noise pollution. As a result, some people's stress levels increased leading to an increased risk of high blood pressure and heart disease. Now, assume that this has had happened in San Diego County, CA. The community members or residents sued SD Airport for producing negative externalities- noise pollution. The final decision or the court verdict was in the favor of the community members. But the judge has failed to come up with an economic model to calculate the total costs of negative externality- noise pollution. To construct the model, the Judge has employed economists to come up with the model to measure the total amount of compensation per household identifying who should get how much, and what factors determine the dollar amount an individual household should receive. Suppose, you are one of the economists who has employed by SD Court to solve the problem by answering the questions below: 1) What is your suggested model to solve the problem? Provide justification for your suggested model. 2) List the factors, at least two, that influence the amount of compensation per household and explain each one of them
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Now, assume that this has had happened in San Diego County, CA. The community members or residents sued SD Airport for producing negative externalities- noise pollution. The final decision or the court verdict was in the favor of the community members. But the judge has failed to come up with an economic model to calculate the total costs of negative externality- noise pollution. To construct the model, the Judge has employed economists to come up with the model to measure the total amount of compensation per household identifying who should get how much, and what factors determine the dollar amount an individual household should receive.
Suppose, you are one of the economists who has employed by SD Court to solve the problem by answering the questions below:
1) What is your suggested model to solve the problem? Provide justification for your suggested model.
2) List the factors, at least two, that influence the amount of compensation per household and explain each one of them.
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