1) Think carefully about an example of a positive externality and other example of a negative externality that youve experienced or can introduce based on a news article.
2) Please provide your analysis. I didnt always introduce the following structure in lecture but I think its really helpful and Ill build it out in the context of my own example. Youll note Ive used the same example for both positive and negative externality. Thats perfectly acceptable for you to do, but please give much better development for the second externality than I will here:
a. Primary activity: Smoking in an open garage
b. Bystander(s): Ben while running past the garage
c. Externality: Secondhand smoke
d. Direct harms: If the neighbor experiences deleterious health effects, albeit unintended, thats not a negative externality.
e. Direct benefits: If the neighbor is success
ful in hiding the smoking habit from his kids, thats not a positive externality.
[You dont need to include D & E, just dont confuse direct benefits/harms with externalities!]
Analysis/explanation: I live near the end of a cul-de-sac of a 1/2 mile long road. I often run later at night e.g. after 10pm and Ill typically run up and down the same street to get between 8 and 20 miles. Most nights when Im out running late, theres a neighbor who stands just inside his garage smoking and most nights the wind carries the smoke down the road and Ill smell it as I pass. To me this creates a negative externality because other things equal Id rather not breathe in smoke while Im running! Its also created a positive externality on me because now I have this example to share in class!
Be sure to defend your reasoning with evidence cited appropriately (APA or MLA)