Week 2: Journal

Description

Externality

[WLO: 3] [CLOs: 1, 2, 4, 6]

Prior to working on this journal, review Chapters 4, 5 and 6 from your textbook, Principles of Microeconomics, Hurricanes, hog manure and the dire need for carbon pricing and the materials on the “Weekly Lecture” page. Submit your response in writing in a Word document or as audio or video file to the Submission Page using the button in the upper right-hand corner of this page. For additional guidance, review the File Submission Quick Start Guide.

In your submission of 1 to 2 page,

• Discuss any one concept from each of the three chapters- Chapters 4, 5, and 6 in your own words.
• Carbon pollution is an example of negative externality. Two solutions to carbon pollution reduction have been offered: 1) Cap and trade – states cap the amount of CO2 that is “acceptable”, and they issue permits to pollute which the businesses must buy from the state if they need to pollute. Those permits are tradable in the open market. 2) Carbon tax: you will be taxed per unit of CO2 that you release into the atmosphere. Based on this,
  • Discuss three pros and cons of cap-and-trade and carbon tax policy.