1) Describe the advantages and disadvantages of using taxes and bounties to regulate negative externalities

Taxes and bounties are economic terms data used in fiscal policy. Taxes are imposed by the government to regulate and maintain the level of revenue. While bounties are the subsidies given by the government related to the social benefits.

Advantages of taxes and subsidies to regulate negative externalities:

1. with the help of taxes the government can regulate and control the social and public cost of production.
2. producers are producing the optimum levels of output to prevent themselves to pay taxes as pollution increases.

Disadvantages of taxes and subsidies to regulate negative externalities:

1. An excess of subsidies reduces the price of commodities and further creates more negative externalities.
2. imposition of taxes on commodity increases the burden of the consumers and creates inflation in the economy.

When an individual takes legal action against a person or organization by creating a legal claim for money or something else related to a professional or private matter, it is defined as a lawsuit.

Advantages: when an individual sues someone for creating negative externalities:

1. An individual as a consumer becomes more aware of their rights.
2. Society produces quality products.

Disadvantages:

In the case of property, when individuals are holding the rights will become more non-beneficial for the economy when the individuals follow the adverse selection approach. This will create the social cost of a negative externality.