{{asɛmtiNe Ɔkyerɛwfo}} | Nhomakorabea | Nneɛma a ɛma wotumi yɛ ade

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

Externality #4. How Amsterdam Became a Cycling Paradise

1

In 1-2 sentences, briefly describe/discuss the economics decision-makers (producers and consumers) in the clip.

1

Yes

No

1

goods and services were being underproduced.

goods and servces were being overproduced.

goods and services were being overconsumed.

goods and services were being underconsumed.

1

Supply

Demand

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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.

1

Negative externality in production

Positive externality in production

Negative externality in consumption

Positive externality in consumption