(a) Explain what negative externalities are, and why there may be a case for government intervention to address them. Describe how taxes/charges and regulation can be used to correct the negative externalities and the pros and cons of each method. Provide real life examples. (6 marks)

(b) Choose a case study from your home country where an externality exists in a current market. Using the key characteristics of the market structures identify the market structure  in your case study. (6 marks)

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(c) Using your case study explain the effect of externality on market outcomes including dead-weight loss and discuss ways that your government has addressed the presence of negative externalities in the market. (8 marks)

(d) Suggest other options for dealing with negative externalities in your case study. (2 marks)

 

Additional marks                                                                                     (8 marks)

Substantial research and analysis.  4 mark

Overall presentation of work, especially use of graphs, clear written expression.   2 mark

 

Appropriate use of referencing.   2 marks

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