ASSIGNMENT:
DQ 1 What is an externality? Provide at least three examples. How does one of the examples you provided affect the market outcome? What is the role of government in addressing the implications of an externality you provided as an example? Is it possible that a government's solution to a market failure would worsen the failure?
DQ 2 What effect do government intervention, taxation, and regulations have on economic behavior? Explain. What are real-world examples of government intervention, taxation, and regulations? What are the goals of each?
DQ 3 Monopolistic Competition and the U.S. Economy There are a smaller number of oligopoly markets in the domestic economy with only a small number of market approximating (but not meeting) the conditions for perfect competition. All monopoly markets are illegal under U.S. federal anti-trust law with only natural monopolies such as water and sewer service permitted by the federal government. Why do you think monopolistically competitive markets are so pervasive in the U.S. economy as opposed to some other market structure? What is an example of a country's economy which is not dominated by monopolistically competitive?