Homework Answers
Negative externality
A manufacturing plant is set up near a river, whose water is used downstream by neighbouring villages for household purposes.
Since the plant releases toxic waste in the water, it affects water quality and thus imposes a negative cost on to the nearby villages. This is a case of negative externality.
Positive externality
A beekeeper keeps bees for honey production. There are crop farms nearby, which get benefitted from the bees as these bees help in pollination of crops, thereby benefitting the crop growers.
This is a case of positive externality, as an external benefit is imposed by bee keeper on to the crops.
Outcome
In case of negative externality, there is overproduction of goods at free market equilibrium and in order to reach social equilibrium, output needs to reduce.
In case of positive externality, there is underproduction of goods at free market equilibrium and in order to reach social equilibrium, output needs to be increased
Incentives
Negative externality: Taxes can be imposed on manufacturing plant equal to the cost imposed on households
Positive externality: Subsidy can be provided to beekeeper to increase his count of bees kept
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HELP ME ASAP!!!
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• What are "market externalities," including "positive externalities" and "negative externalities? Give two examples of positive externalities and two of negative externalities. Discuss negative externalities in view of "The story of stuff" • What is "Karl Polanyi's Paradox" (not his brother "Michael Polanyi's Paradox")? Give an example. What is the "Malthusian" theory of population, and what is its underlying ideology? What are the general arguments against Malthusian theory? What is the concept of "the carrying capacity of the Earth"? What...
Questions 1. Give two examples of goods that are associated with positive externalities. Do not use the examples given in your textbook. 2. Suppose production of a good results in a negative externality. a. What is the relationship between the social cost of the good and the private cost of the good? b. What is the relationship between the market quantity of the good and the socially efficient quantity? c. What is one way the government can intervene in the...
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HELP ME ASAP!!!
13. Correcting for negative externalities - Taxes versus tradable permits Paper factories emit chemicals as a waste product. This generates a cost to society that is not paid for by the firm; therefore, pollution is a negative externality of paper production. Suppose the U.S. government wants to correct this market failure by getting firms to internalize the cost of pollution To do this, the government can charge firms for pollution rights (the right to emit a given...
7. Correcting for negative externalities - Taxes versus tradable permits Power stations emit sulfur dioxide as a waste product. This generates a cost to society that is not paid for by the firm, therefore, pollution is a negative externality of power production Suppose the U.S. government wants to correct this market failure by getting firms to internalize the cost of pollution. To do this, the government can charge firms for pollution rights the right to emit a given quantity of...
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