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It has been argued that your consuming a Big Mac does not create an externality. But supposeyou arrive at your McDonald’s at lunchtime and get in a long line to be served. By the time youreach the counter, there are 10 people in line behind you. Because you decided to have a Big Macfor lunch – instead of, say, a pizza – each of those 10 people must wait in line an additional 2minutes. Or suppose that after a lifetime of consuming Big Macs, you develop heart disease.Because you are now over age 65, the government must pay most of your medical bills throughthe Medicare system. Is it still correct to say that your consuming a Big Mac created noexternalities? Might there be a justification here for the government to intervene in the market forBig Macs? Explain.
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