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Micro 6.1-Defining Externalities-Externality #4-Biking in Amsterdam
By Michael Burbine
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Last updated over 1 year ago
6 questions
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Today we will watch 4 video clips. Each video clip will help us discover one of the 4 types of externalities.
https://www.youtube.com/watch?v=DKbRL6Opifg&t=22s
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Externality #4. How Amsterdam Became a Cycling Paradise
Question 1
1.
In 1-2 sentences, briefly describe/discuss the economics decision-makers (producers and consumers) in the clip.
Question 2
2.
Was society being affected in this video?
Yes
No
Question 3
3.
Initially, the reason society was being affected, was because....
goods and services were being underproduced.
goods and servces were being overproduced.
goods and services were being overconsumed.
goods and services were being underconsumed.
Question 4
4.
Based on your answer, is this is supply issue (production) or a demand issue (consumption)?
Supply
Demand
Question 5
5.
To fix the externality...
The producers should internalize the cost of the negative externality with a per-unit tax.
The producers should externalize the benefit of the positive externality with a per-unit subsidy.
The consumers should internalize the cost of the negative externality with a per-unit tax.
The consumers should externalize the benefit of the positive externality with a per-unit subsidy.
Question 6
6.
This video shows an example of a....
Negative externality in production
Positive externality in production
Negative externality in consumption
Positive externality in consumption