Problem
In each of the following situations, explain how government intervention could improve society's welfare by changing people's incentives. In what sense is the market going wrong?
a. Pollution from auto emissions has reached unhealthy levels.
b. Everyone in Woodville would be better off if streetlights were installed in the town. But no individual resident is willing to pay for installation of a streetlight in front of his or her house because it is impossible to recoup the cost by charging other residents for the benefit they receive from it.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.