In the state of California, rice growers burn their field stubble to sanitize their fields. The field burning causes serious air pollution. The alternative sanitizing method costs $150 per acre. Consider a county where rice farmers are currently willing to pay $500 per acre for land, and corn farmers (who do not sanitize their fields) are willing to pay $300 per acre. The total output of the county is small enough that the prices of rice and corn are unaffected by events in the county. Suppose that field burning is outlawed in the county, forcing rice farmers to switch to the alternative sanitizing method.
a. How does the field-burning law affect rice consumers, corn consumers, farmers, and landowners? In other words, who bears the cost of the pollution-control program?
b. How would your answer to (a) change if the cost of the alternative method were $250?
c. How would your answer to (b) change if field burning were outlawed in the entire state of California?