Market Failures: Externalities
Analyzing situations where the market fails to allocate resources efficiently due to external costs or benefits.
Key Questions
- Differentiate between positive and negative externalities with real-world examples.
- Analyze who benefits and who bears the costs when a factory pollutes a river.
- Explain how government intervention can internalize externalities.
Ontario Curriculum Expectations
Suggested Methodologies
Ready to teach this topic?
Generate a complete, classroom-ready active learning mission in seconds.
More in Market Structures and Firm Behavior
Introduction to Firm Costs and Revenue
Understanding the various types of costs (fixed, variable, total, marginal) and revenue (total, marginal) for a firm.
2 methodologies
Profit Maximization Rule (MR=MC)
Applying the marginal revenue equals marginal cost rule to determine a firm's optimal output level.
2 methodologies
Perfect Competition: Characteristics & Outcomes
Examining the characteristics of perfectly competitive markets and their efficiency outcomes.
2 methodologies
Monopoly: Characteristics & Inefficiency
Analyzing the characteristics of monopolies, their pricing power, and the resulting inefficiencies.
2 methodologies
Monopolistic Competition
Studying market structures with many firms offering differentiated products.
2 methodologies