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ECOS3997: Topics in Public Economics

Essay Prompt for Week 7 tutorial

Understanding and Addressing Externalities in Modern Economies

Externalities are a central concept in economics, representing costs or benefits that affect

third parties who are not directly involved in an economic transaction. These can lead to

significant impacts on market efficiency and result in market failures if left unaddressed. In

this essay, you are required to explore the multifaceted nature of externalities and their role

in modern economies.

Essay Requirements:

• Length: 400-500 words

• Format: Type into the Canvas textbox.

• Citations: Use APA or MLA format for any references or quotations.

• Deadline: End of your Week 7 Tutorial session.

Instructions:

Write a 500-word essay focusing on one of the following topics related to externalities. Your

essay should provide a comprehensive understanding of how externalities impact the chosen

sector and propose well-reasoned solutions to manage these externalities effectively.

Support your analysis with real-world examples and relevant economic theories.

Topics to Choose From:

1. Environmental Issues:

o Analyze how negative externalities contribute to a specific environmental issue,

such as climate change or pollution. Discuss the role of governmental and

organizational policies in mitigating these externalities.

2. Education and Public Health:

o Explore how positive externalities manifest in education and public health,

providing examples of how these sectors benefit society. Evaluate the

effectiveness of specific policies aimed at enhancing these externalities.

3. Technological Advancements:

o Examine how technological innovations, like social media, electric vehicles, or

renewable energy, can generate both positive and negative externalities. Discuss

the challenges and opportunities these technologies present in managing

externalities to maximize societal benefits.

4. Urban Development:

o Analyze how externalities influence urban development, focusing on issues like

traffic congestion, housing, or green spaces. Discuss the strategies urban planners

and policymakers can adopt to address these externalities and promote

sustainable urban growth.

5. Healthcare System:

2

o Investigate the role of externalities in the healthcare system, particularly how they

affect healthcare access, quality, and costs. Provide examples of policies that

address healthcare externalities and assess their impact on the overall system.

Considerations:

• Market Efficiency: Discuss how the selected externality affects market efficiency and

leads to market failure if left unaddressed.

• Government Intervention: Consider the role of government intervention in correcting

market inefficiencies caused by the externality. Evaluate different policy approaches, such

as taxation, subsidies, regulation, and public awareness campaigns, discussing their

potential effectiveness and limitations.

Submission:

• Submit your essay via Canvas by the deadline.

• Ensure that your essay is proofread and free from grammatical and spelling errors.

Marking Rubric

Points (Total: 10) 5 4 3 2 1

Knowledge of topic

(5 points)

Student shows

advanced knowledge

the economic topic

taught in their stream,

and has new and novel

insights.

Student shows

advanced knowledge

the economic topic

taught in their stream,

and is working towards

new and novel insights.

Student shows good

knowledge of the

economic topic taught

in their stream.

Information conveyed

to audience is correct

and informative.

Student shows

acceptable knowledge

of the economic topic

taught in their stream.

Information

conveyed to audience is

correct.

Student does not show

evidence of having

engaged with the

economic topic taught in

their stream. Information

conveyed to audience is

incorrect or confusing.

Communication

(5 points)

Extremely clear

structure and logical

development of ideas.

Prose is engaging and

easy to read.

Clear structure and

logical development of

ideas. Few spelling and

grammatical errors.

Good structure and

generally logical

development of ideas.

Some errors in spelling

or grammar present.

Deficiencies in structure

and/or development of

ideas. Some errors in

spelling or grammar

present.

Unclear structure and

confusing development

of ideas. Grammar

and/or spelling

significantly impede

communication of

content.

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