Find an industry sector/s To which a solution to a failing market has been found in terms of an externality of a pollutant produced through production/consumption of a good
APPENDIX GA36c
| TASK DESCRIPTION |
ASSESSMENT 1: Essay 2,500 Words
Online submission by Turnitin:
Find an industry sector/s, for example Textile, Petroleum, Automobile, Electricity, Paper etc. etc. To which a solution to a failing market has been found in terms of an externality of a pollutant produced through production/consumption of a good, e.g., paper, oil, tobacco etc., in a particular country – this could be a tax or regulation that has been put in place, to solve the problem of the externality, which could be for example the release of SO2 (Sulphur Dioxide), tobacco smoke Ozone,. etc. into the atmosphere, or Nitrates into rivers etc. etc.
Then, once selected you show how the market was failing before the solution was put in place, using evidence of real figures (of externality costs for example health costs, ecology damage costs etc. etc.) gleaned from other authors talking about it or government websites, you must also hypothetically show this using basic economic diagramming (use as a demonstration tool without figures).
Next look at the solution, for example a tax on SO2 (Sulphur Dioxide) release or regulation used to correct the market failure and show using information evidence (based on benefits and costs used to decide on the solution and what level was proposed for it, to fix the failing market to take into consideration these externality costs) gleaned from other authors or government websites stating how the market failure was solved through implementation of the solution. Again, you will also need to show hypothetically using basic economic diagramming how the solution works.
Essential Read
AP MICROECONOMICS. 2022. Externalities – AP Microeconomics. [online] Available at: <https://www.microeconomicsap.com/externalities-ap-microeconomics.html> [Accessed 23 February 2022].
Callan, S. J., & Thomas, J. M. (2013). Environmental economics and management: Theory, policy, and applications (6th ed.). Mason, OH: South-Western, Cengage Learning.
Sloman, J. (2019). Economics for business. Harlow, England: Pearson.
Basic summary of how to tackle assessment one below
The way to approach this assessment is to find an industry to which a solution to a failing market has been found in terms of externality for example, of a pollutant produced through production of a good, like petroleum, in a particular country – with the solution being a tax or regulation that has been put in place, to address the problem of the externality, which could be for example the release of CO2 into the atmosphere.
Then once selected you should show how the market was failing before the solution was put in place, using evidence of real figures (of externality costs for example health costs, ecology damage costs etc. etc.) gleaned from other authors talking about it or government websites. Based on this you must also hypothetically show this market externality using the correct diagram (use it as a demonstration tool without data figures) from the week two session one lecture “Modelling Market Failure.” so it will either be
- A positive or Negative Production externality,
- or a Positive or Negative Consumption externality
Then next you should look at the solution which was used to solve the problem, for example a tax on petroleum producers or regulation used to correct the market failure and show using information evidence (based on benefits and costs used to decide on the solution and what level was proposed to fix the failing market to take into consideration these externality costs (real figures)) these should gleaned from other authors or government websites stating how the market failure was solved through implementation of the solution. Then based on this you must hypothetically show using the correct diagram how your solution would correct the market failure identified (without data figures), taken from week 2 (session 2 ) & week 3 (session 1 & 2)
