Question

This week, we cover Trade and Externalities. Choose whichever topic you found of most interest (trade OR externalities) and respond to the following questions. Note: Each response should only be 3 - 5 sentences.

1. What surprised you most while learning about this topic, and why?
2. What was the most important thing to you that you learned from this topic? Why do you think it's most important?
3. What one question remains uppermost in your mind?
4. How is what you learned this week relevant to you in your life (outside of class!)
5. What made you curious about this topic – what did you want to learn more about and why?

Answer 1

I have chosen externalities.

1. What surprised you most while learning about this topic, and why?

It surprised me that while I was almost always, even if only intuitively, aware of negative externalities such as pollution, I never really thought about positive externalities. It was a pleasant realization that while there are negative externalities all around, there are also positive externalities benefitting us continuously.

2. What was the most important thing to you that you learned from this topic? Why do you think it's most important?

The most important thing is, in my opinion, is the ubiquitousness and impact of externalities on our daily lives. From the obvious ones such as noise from airplanes to subtle ones such as increased use of antibiotics resulting in resistant bacteria- they impact us in all walks of life.

It is important because for something that impacts us so much, there seems to be very little general awareness about most of these apart from the obvious ones.

3. What one question remains uppermost in your mind?

I keep thinking that is any economic study or model really complete without externalities? We look at supply and demand and cost of manufacturing and purchasing and all the models associated with it, but should we not always include a penalty or benefit term for externalities into all of these? Do we only talk in terms of monetary benefit or do we add physical, mental and spiritual benefits also?

4. How is what you learned this week relevant to you in your life (outside of class!)

My mother maintains and small garden behind our house. It is something she likes to do for herself. But since it gives the whole family pleasant environment and fresh air, isn’t it a positive externality to us? While obvious, it felt like a revelation in economic terms.

5. What made you curious about this topic – what did you want to learn more about and why?

As stated above, the omnipresence and importance of this topic interests me. I want to learn more about incorporating externalities in economic studies more closely. The reason is simple- to me all economic study looks incomplete if we are not taking all benefits or losses into account.