Question

Specifically answer this prompt: Have you ever experienced a negative or positive externality? Specifically identify the "consumers" and the "producers" in the market, and how you were affected by that market. Specifically explain what the positive or negative externality is, and if possible give a dollar value of that positive or negative externality.

Use either government regulation or the Coase Theorem in your response and be specific on the type of regulation (e.g. taxes, subsidies, command & control).

One example is: open gravel truck beds on the freeway. On the freeway I often drive by large semi-trucks carrying gravel in open beds. Sometimes large pebbles or small rocks will fly out of the open bed and strike and dent my car or could crack my window. The market here is between the gravel producers (and transporters) and those who will purchase the gravel. These pebbles act as a negative externality in the market for gravel, specifically in the form of damage to my car and to other peoples' vehicles who do not participate at all in this gravel market.

please include a personal story about positive or negative externalities in a market.

Include a detailed and accurate application of one or more of the concepts: positive externality, negative externality, deadweight loss, property rights, coase theorem.

Answer 1

Positive externality is when Government imposes minimum education level for all citizens at zero investment cost.

This causes net social welfare as producer that is government causes social benefit to the consumers that is workforce who inturn creates ripple effect by bringing largescale positive changes to society and thus positive externality is achieved.

Using government regulation we see that government provides incentives to pursue minimum education level and promotes this externality for higher productivity and efficiency in economy and reduce unemployment.