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Unformatted text preview: also showed that this result holds
regardless of whether the externality is consumption-based or production-based. Demonstrate
graphically that the opposite holds with a positive externality. Create TWO graphs that show that goods
associated with a positive externality (one for a consumption and one for a production externality), the
efficient quantity of exchange is higher than that which is determined by the market. Label each with an
appropriate example (like we came up with in class).
Consumption side – getting immunized Production side – growing organic produce 2) A Neighborhood Externality
Erica grows garlic in her backyard organic garden and sells it at the Milwaukee Farmer's Market...
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This document was uploaded on 03/11/2014 for the course ECON 328 at Wisconsin Milwaukee.
- Spring '08
- Environmental Economics