In chapter 1 the author talks a bit about how \"rational\" people make decisions

Question

In chapter 1 the author talks a bit about how "rational" people make decisions. One point that was left out was incentives. In economics we assume people respond to incentives, and thus policy makers use incentives to change peoples behaviors. However, sometimes how incentives change peoples behaviors in a way we did not intend. This is referred to as an "unintended consequence." For this discussion please listen to the podcast I posted in this week's content or read the Transcript for this week's podcast.

Transcript: http://freakonomics.com/2011/01/13/trashed-full-transcript/

Podcast: http://freakonomics.com/podcast/freakonomics-radio-the-economics-of-trash/

Make an argument for or against your local city passing a trash law similar to the ones described on the podcast. Please make sure that your argument is based on the concepts you have learned in chapter 1, such as marginal cost/benefit, sunk cost, incentives, unintended consequences ect.   

Explanation / Answer

Government has passed a trash law where the garbage needs to be treated before before it is discharged. Moreover, every firm and household should take the onus to cut down the garbage production and to dispose it off properly. It should not harm the environment. The marginal cost of disposing off the garbage should be lower than the marginal benefit which the society derives out of disposing it off.

People should get some incentives of disposing off the garbage. Then they would be motivated to keep the surroundings clean. This would be the unintended consequences which the people get after disposing off the garbage.

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