4. The city of Falls Church, Virginia, subsidizes the planting of trees in homeowners’ front yards when they are within 15 feet of the street.
Using concepts in the chapter, explain why a municipality would subsidize planting trees on private property, but near the street.
Draw a diagram similar to Figure 10-4 that shows the marginal social benefit, the marginal social cost, and the optimal Pigouvian subsidy on planting trees.