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April 7th, 2023

I’m trying to study for my Economics course and I need some help to understand this question.

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1. The author mentions how taxpayers bear the burden of protecting homes in wildfire-prone parts of California. Explain why taxpayers ultimately bear at least some of this burden.

2. What is the endowment effect? Why does the author suggest it is a problem in the context of rebuilding after wildfires? How does the author suggest we should address the problem?

3. The author mentions that some would like to ban people from living in fire-prone areas entirely. Do you think an outright ban would be a better approach than imposing extra taxes or fees on people living in fire-prone places? Discuss what you believe are the relative advantages and disadvantages of these different approaches.

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