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Assignment: Chapter 5: This chapter focuses on externalities in the context of producing goods and services, but like many concepts in our course, these ideas are very applicable to our daily lives. In this discussion, please:
1. Identify and describe a situation where you have experienced either a positive or negative externality.
2. State clearly what the external cost or benefit is.
3. Estimate the dollar value of the externality. You may not be sure how to do this, so consider asking yourself the following: If it's a positive externality, what is the highest price you would be willing to pay for the external benefit you received? If it's a negative externality, what is the lowest price you would be willing to accept as compensation for the external cost you are bearing?
4. How many people in total are affected by this externality? Recommend either a tax or subsidy amount that the externality creator should pay or receive (to "internalize the externality") based on the number of people affected. You may assume that everyone affected has the same valuation for the externality as you do.
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Economics thesis undergrad 4th year paper to write. it should be about 22 pages in length, literature review, economic analysis and then data or cost benefit analysis.
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