Question

1. List 5 examples of negative externalities DO NOT USE ANY EXAMPLE LISTED HERE (smoking, gun control, drinking, taxing, gasoline, aluminum, seat belts, people talking in class, students lying to teachers, professors who dont erase the whiteboard when done, parents who think whapping their kid is always the best and only way to discipline, bad roommates, k-12 teachers test memorization skills and suck the intellectual curiosity out of students ) discussed in either the textbook or the notes. For each example state the negative externality and state whether you believe government intervention would improve efficiency. a. List 5 examples of  positive externality DO NOT USE ANY EXAMPLE LISTED HERE (education, people talking in class about class material, good parents, alumni who make it big, public radio and television, fine arts, libraries, faculty research, moderate wine consumption,  ). For each example state the postive externality and state whether you believe the government internvention would improve efficiency.

Answer 1

Here, providing you with 3 of each. More points were going to be repetitive and undesirable. Hope you find the solution helpful.

Negative externalities-

1. Air Pollution: Pollution can be caused by vehicles. It is a negative externality and causes global warming.

Government intervention by imposing taxes on increases level of pollution or by imposing odd even policy as has happened in many countries can improve efficiency.

2. Households/industries waste: It is caused by increased consumption in households or increased production in Industries. It in turn causes land or water pollution which increases the extent of diseases in the economy.

Government intervention can help to an extent but ultimately the control on the disposal has to be done by the households or industries itself.

3. Gambling: now you know what gambling means. It is indeed a negative externality and creates a bad impact on the economy.

Well, government intervention cannot ban gambling to the full extent and but it can to some level to improve efficiency in the economy.

Positive externalities-

1. Advancement of technology: Now advancement in technology can increase the production of any economy. It is thus a positive externality.

The government can sure improve efficiency by intervening and introducing some policy advancement measures.

2. Plantation of trees/plants: plantation of new trees will help generate oxygen and will be useful for the economy. Good for human beings as well as animals and plants.

Government can encourage plantation of trees.

3. Car pool: Pooling the car can help reduce the pollution and makes the economy more efficient. This way government will not have to impose policies like odd even etc.