For each of the examples below, please answer the following:
a. Does an externality exist? If so, classify the externality as positive/negative (or both).
b. If an externality exists, determine whether the Coase Theorem applies (i.e. is it possible to assign property rights and solve the problem?
c. If it is possible for the Coase Theorem to solve this problem explain how.
Example 1 – ABC Company builds a garbage recycling plant in a low-income area of the city.
Example 2 – Your neighbors (whose apartment is right next door and has thin walls) are big fans of football and they blast their television at all hours watching games.
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