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Externalities around you
Externalities! How can we address them?
Search the internet for an example of an externality. Choose one that is not in the book or in my notes.
Explain whether it is a positive or negative externality, who is the supplier, who is the demander, and who is the external party that receives the benefit or cost.
Describe how this externality could be resolved. Can simple bargaining among the private agents help internalize the externality? Why or why not?
Is government action more likely to help or to hurt? What kinds of government policies would you consider (specific regulation, taxes or subsidies, tradeable credits, etc.)?
Standards
Reputable sources (well-known news organization, government, think tank, university prof). Look for something written within the last twelve months. Look for economics blogs that discuss business and the economy. No conspiracy theories, profanity-laced websites, or racist manifestos.
350 words minimum, 500 words maximum.
Be clear, concise, concrete, and complete. Your discussion should describe the externality and its possible solution in detail.
Come up with an interesting title.
Cite your sources by including the URL (web link).
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