An example of a negative externality is
a) you play loud music on at night and your neighbours cannot sleep
b) you sing to yourself in your room where no one can hear you
c) you give away free cookies to people that are near you
d) the government imposes a tax on the rich
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When a market is inefficient
When there is a negative production externality
In the presence of negative externalities, there is
The above curves are for an industry that produces an externality. The optimal price and quantity for society is _________ because this industry produces a _________ externality.
Since Mary often texts while she drives, she is generating a _______ to others, resulting in a shift of the supply curve to the ______.
Practice: Externality
The above curves are for an industry that produces an externality. What is the free market equilibrium price and quantity?
Externalities
Cigarette smoking creates a _____________externality.
In the diagram above, what is the producer surplus at the socially optimal output level?
When there is a negative externality due to pollution the government can intervene to