Wednesday, October 12, 2016

G11 - Week 9 - Day 1

In-class work
  1. Exercises 1-3, page 133
  2. Positive Externalities of Production as a Market Failure
  3. Positive Externalities of Consumption as a Market Failure
  1. Ch. 5-6 assessment on Thursday, October 20th
  2. Make sure to be reading news sources and collecting real-life examples of market failures 

Currently Reading

Other People's Money: The Real Business of Finance
In most Western economies today, the assets and liabilities of banks exceed the assets and liabilities of the government and the aggregate annual income of everyone in the country. But these assets and liabilities are mainly obligations from and to other financial institutions. Lending to firms and individuals engaged in the production of goods and services— which most people would imagine was the principal business of a bank— amounts to less than 10 per cent of that total. In Britain, with a particularly active financial sector, that figure is less than 3 per cent. (Kindle Locations 181-185)


  1. 1) Steel producing firm might pump pollutants into the air.
    2) Producing chemicals causes water pollution which negatively impacts fishermen.

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  4. Examples of Negative Production Externalities are steel producing firm might pump pollutants into the air, building a new road causes the loss of a beautiful landscape that the people can no longer enjoy, and a manufacturer of computers which emits pollutants into the atmosphere.

  5. Negative production externalities is when nor the consumer who enjoys using it and nor the producer who is paid for it is affected.It is when a THIRD PARTY who is negatively affected by it.
    For Example:-Workers who make fireworks may suffer from diseases,burns or can even die as they use strong chemicals in making it.Here nor they owner of the factory or business is affected and nor they buyers(people like us who may like fireworks and buy it)get affected.It is therefore the workers who are affected.

  6. 1- If you play loud music at night your neighbour may not be able to sleep.

  7. 1) these externalities are cause extra cost for the producers
    2) steel production pump causes pollution that is released into the environment

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  9. production of chemicals generates chemical waste which is dumped into the ocean therefore this is a negative externality as the government would need to pay to clean it up and people might get sick from the water.

  10. Negative Externalities is when either the consumer or the producer of a product are affecting other party but not paying for those damages.Examples of production externalities:
    1- Food production may pollute the environment because of the pesticides used in the crop.
    2- Employees that work with chemicals can damage the workers system while the owners of the firm get richer.

  11. If you drive a car, it creates air pollution and contributes to congestion. These are both external costs imposed on other people who live in the city.

  12. Defintion:
    Negative externality is the cost that someone else has to pay for someone else's purchase.

    Could be when someone wants to build a new building where a park used to be, like the one across the street from our school. The other people get a new building to work and make money but now when we look outside of the window, we see a construction site instead of a park where we can run and eat.

  13. Negative Externalities of Production
    Playing the drums loudly prevents your family from relaxing

    Negative Externalities of Consumption
    Listening to loud music prevents others from relaxing

    Positive Externalities of Production
    Producing more taxis in Singapore means the car companies to increase sales

    Positive Externalities of Consumption
    Eating lots of pizza causes soda companies to benefit from the increase in sales

  14. 1. Pollution released from all production companies.

  15. Noise pollution, Water pollution

  16. Pollution created by using my car

  17. Negative externalities:
    1. Overuse of electricity (costs environmental pollution)
    2. Using cars and other forms of transport, causing environmental pollution.
    3. Mass usage of paper and ink (cutting down trees)

  18. I play a lot of loud music. Noise pollution.

  19. Eating meat, because the meat industry contributes to a lot of greenhouse gases

  20. Negative externalities:
    Carbon dioxide. released by breathing, factories, cars, etc.

  21. A negative externality is a cost that is suffered by a third party as a result of an economic transaction.

    One example would be the making of plastic, which greatly harms the enviornment by putting lots of plastic wastes out which interfere with the local animals.

  22. air pollution and noise pollution.