The past decade has seen the growing popularity of genetic testing services like Ancestry.com and 23andMe. Those services profile your DNA, determine your likely ancestry, and can even link you to relatives who share similar DNA. Recently, law enforcement agencies have begun matching DNA collected in cold cases against DNA profiles generated by genetic testing services (and voluntarily shared by those tested). By linking to relatives of a suspect, those law enforcement agencies have solved several high-profile crimes.a. Identify the externality described in this problem.b. Using the terminology developed in the chapter, explain why markets are over- or underproviding DNA testing services.c. What is the appropriate government policy to remedy the over- or underprovision of DNA testing services—quotas, taxes, subsidies, or cap-and-trade? Explain why each choice is appropriate or inappropriate.
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