The factory created positive externalities (more customers) but also negative externalities (exhaust fumes and litter). Linh started a recycling program: customers who returned a clean bowl got a 2,000 VND discount. This internalized part of the litter externality. The city noticed and offered her a tax deduction for being the first "green pho" shop.
Linh grew up in District 3, Ho Chi Minh City, helping her grandmother sell pho from a street cart. Her grandmother, Bà Tám, made the same 80 bowls daily—no more, no less. "It’s tradition," she said. principles of economics asia-pacific edition
A year later, Linh opened a second shop near the new metro line (a government infrastructure project financed by ADB loans). She hired four workers. Their wages contributed to Vietnam’s GDP via consumption and investment. When a journalist asked how she succeeded, Linh pulled out her dog-eared copy of Economics: Asia-Pacific Edition and said: "My grandmother taught me pho. This book taught me to see the invisible hand." The city noticed and offered her a tax
Linh’s friend, Sam, ran a cà phê sữa đá stand next door. He was fast at making coffee but slow at chopping herbs. Bà Tám was excellent at broth but clumsy with coffee. Linh proposed a trade: each morning, Sam’s helper would chop Linh’s herbs, and Linh’s helper would grind Sam’s coffee beans. By specializing according to comparative advantage (not just doing what they were good at, but what they were relatively better at), both stands increased output without extra labor. Total bowls rose to 95; coffee cups rose to 120. "It’s tradition," she said
The factory created positive externalities (more customers) but also negative externalities (exhaust fumes and litter). Linh started a recycling program: customers who returned a clean bowl got a 2,000 VND discount. This internalized part of the litter externality. The city noticed and offered her a tax deduction for being the first "green pho" shop.
Linh grew up in District 3, Ho Chi Minh City, helping her grandmother sell pho from a street cart. Her grandmother, Bà Tám, made the same 80 bowls daily—no more, no less. "It’s tradition," she said.
A year later, Linh opened a second shop near the new metro line (a government infrastructure project financed by ADB loans). She hired four workers. Their wages contributed to Vietnam’s GDP via consumption and investment. When a journalist asked how she succeeded, Linh pulled out her dog-eared copy of Economics: Asia-Pacific Edition and said: "My grandmother taught me pho. This book taught me to see the invisible hand."
Linh’s friend, Sam, ran a cà phê sữa đá stand next door. He was fast at making coffee but slow at chopping herbs. Bà Tám was excellent at broth but clumsy with coffee. Linh proposed a trade: each morning, Sam’s helper would chop Linh’s herbs, and Linh’s helper would grind Sam’s coffee beans. By specializing according to comparative advantage (not just doing what they were good at, but what they were relatively better at), both stands increased output without extra labor. Total bowls rose to 95; coffee cups rose to 120.
