Identify a positive externality in consumption via example, and if possible include a link to a...

Identify a positive externality in consumption via example, and if possible include a link to a source that is not contagious disease or education.

1. Identify the impacted markets, where the externality arises and who is impacted by the externality. Include a supply and demand graph in your posting.

2. Discuss the difference between the best outcome for society and the best outcome for the involved individuals.

3. Create two reasonable polices that may be enacted to encourage the market to ‘not fail’. I.e. what structures or incentives/penalties might the government put in place to lead the market toward a socially optimal outcome. Show the impacts of each of the two policies graphically – best to use a changed version of your graph from the above question.

Expert Solution

Rahul Sunny answered 2 years ago

Define with appropriate example, a positive consumption externality and how it leads to inefficiency. Provide two...

Define with appropriate example, a positive consumption externality and how it leads to inefficiency. Provide two possible solutions to this problem?

Provide an example of ‘positive’ “externality” and an example of ‘negative’ “externality.” Explain The effect in...

Provide an example of ‘positive’ “externality” and an example of ‘negative’ “externality.” Explain The effect in terms of “market failure” of each example.

Provide an example of positive externality and an example of negative externality that would justify protectionism....

Provide an example of positive externality and an example of negative externality that would justify protectionism. Discuss how protectionism can help reach that goal. If you can think of a better policy to reach the goal desired through protectionism, please explain that policy and why it would be preferable

Give an example of a negative externality and possible externality. Explain why market outcomes are inefficient...

Give an example of a negative externality and possible externality. Explain why market outcomes are inefficient in the presence of externalities.

Consider the case of a positive consumption externality. Suppose demand and supply are given by: Demand:...

Consider the case of a positive consumption externality. Suppose demand and supply are given by: Demand: Xd=(A-P)/α Supply: Xs=(B+P)/β where P is the price of the good, Xd is the quantity of good demanded, Xs is the quantity of good supplied, and A, B, α, and β are parameters. Answer the following questions. Note that graphs will be helpful in your analysis. However, make sure to provide mathematical derivations of the solutions. Derive the competitive equilibrium price and output level....

1. Which of the following is an example of a positive externality? The noise created by...

1. Which of the following is an example of a positive externality? The noise created by an auto racetrack located near a residential area Toxic chemicals dumped into a river that is used as a water supply A neighbor who refuses to mow his yard or paint his house A lower crime rate in a neighborhood patrolled by a security company 2. A tax levied on gasoline is predicted to: reduce production and consumption, leading to more pollution. reduce production...

Identify and explain the externality associated with the consumption of cigarettes? b) Draw a fully labelled...

Identify and explain the externality associated with the consumption of cigarettes? b) Draw a fully labelled diagram illustrating how the externality identified in part (a) above can be corrected from society’s point of view. c) The Australian government is considering running advertising campaigns to stop or a least slow down the purchase of cigarettes. What is the opportunity cost for the Australian Government if it chooses to do this? How does rational decision making help a government decide how much...

Give an example of a positive or negative externality related to your work experience or your...

Give an example of a positive or negative externality related to your work experience or your own personal experience. Explain the external cost or external benefit in your example. Also be sure to explain whether it is a real or pecuniary externality. Suggest remedies for real externalities (policies, cooperative agreements, market approaches etc.)

Give a personal example of a good that has a positive network externality. Give a personal...

Give a personal example of a good that has a positive network externality. Give a personal example of a good that has a negative network externality. Explain why you chose these two goods.

Use an example of a positive externality arising due to COVID 19 to explain what is...

Use an example of a positive externality arising due to COVID 19 to explain what is meant by a positive externality and how it affects the efficiency of markets.

Question