eco 365 week 4 dq

  1. A. Describe an externality created by a firm in your state. B. What are the social costs associated with the externality? C. List three remedies that the federal, state, or local government could introduce to reduce the problem. 
  2. What does it mean when the economists suggest that “too much” of a good or service is consumed? 

    What is the cause of this externality?

    What can be done about it?

  3. Some professors penalize students with excessive, unexcused absences by making a portion of a student’s course grade depend on his or her attendance record. From an externality framework, explain why the penalty is justified
  4. Would a zero-tolerance policy giving an F to any student with one unexcused absence is not optimal for the class? Can you see how this question also applies to pollution externalities?
  5. Do property rights motivate socially beneficial behavior using a “carrot” or a “stick?”
  6. In recent years, one of the few taxes that communities around the country have supported is for the purchase of open space land. Explain this phenomenon using private property rights and public goods concepts.
  7. In the case of negative externalities like pollution, the government can choose from three policies. What are they and which do you recommend and why?
  8. What can the government do to promote positive externalities? Can you think of examples?
  9. Mergers are treated differently, depending on the type of merger and the effect on the industry.  There are three types of mergers: Horizontal mergers are between companies selling similar products in the same market; Vertical mergers are between firms at different stages of the production process in the same industry; Conglomerate mergers are between firms in unrelated industries.

    1.  Consider a product that you purchase that has been affected by a merger. What type of merger was it? Did it affect the product or price?
    2.   Suppose a proposed merger of firms would simultaneously lessen competition and reduce unit costs through economies of scale.  Do you think such a merger  should be allowed?
    3.  What types of industries, if any, should be subjected to industrial regulation?  What specific problems does industrial regulation entail? 

    10 Mergers can give benefits to the public. Can anyone give an example and explain the reasons why?


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