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Real Life Externalities

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by

Danielle Harris

on 3 December 2013

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Transcript of Real Life Externalities

http://www.bbc.co.uk/news/technology-25051312
Online Gambling Legalized In New Jersey
Negative Consumption Externality
Positive Production Externality
http://www.nytimes.com/interactive/2013/11/21/technology/how-a-winbot-730-robotic-window-cleaner-works.html?ref=technology&_r=0
Inside the Winbot 730, a Robotic Window Cleaner
Quantity
Price
Marginal Social Cost
Marginal Private Benefit
Qopt
Popt
P1
Potential Welfare Loss
Q1
Marginal Social Benefit
Quantity
Price
Marginal Social Cost
Qopt
Popt
P1
Potential Welfare Gain
Q1
Marginal Social Benefit
Marginal Private Cost
In this situation the government should raise the price or place a fee on the online gambling...
In this situation the government should give a subsidy or anything related such as raw materials or research...
http://articles.economictimes.indiatimes.com/2013-09-11/news/41971589_1_professional-oral-care-colgate-palmolive-dental-therapies
Colgate expands toothpaste range in India
Positive Consumption Externality
Quantity
Price
Marginal Social Cost
Marginal
Social
Benefit
Qopt
Popt
P1
Potential Welfare
Gain
Q1
Marginal
Private
Benefit
If the government wants to increase the benefits they would put a subsidy on the good...
http://articles.economictimes.indiatimes.com/2013-09-11/news/41971589_1_professional-oral-care-colgate-palmolive-dental-therapies
Just 90 companies caused two-thirds of man-made global warming emissions
Negative Production Externality
Quantity
Price
Marginal
Private
Cost
Qopt
Popt
P1
Potential Welfare Loss
Q1
Marginal Social Benefit
Marginal
Social
Cost
The government would have to either tax the companies products, or introduce stroger regulations...
Real Life Externality Examples
By Danielle Harris
MSB = MPB
MSC = MPC
MSB = MPB
MSC = MPC
Full transcript