Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

ECONIMICS 405: Assignment2: Externalities - Assignment Example

Comments (0) Cite this document
Externalities Name: Institution: Course: Instructor: Date: Externalities Introduction Externalities are those effects of a project to the environment around them, which are indirect and were never intended as the major purpose for that project as from its initiation…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.1% of users find it useful
ECONIMICS 405: Assignment2: Externalities
Read TextPreview

Extract of sample "ECONIMICS 405: Assignment2: Externalities"

Externalities Externalities Introduction Externalities are those effects of a project to the environment around them, which are indirect and were never intended as the major purpose for that project as from its initiation. Externalities can either be negative or positive depending on whether it causes a cost or benefit to the stakeholders and the nearby environment. When the cost of the effect exceeds the benefits, we say that the externality is a negative one; whereas when the benefits of the effect exceed the cost, then it is said to be a positive externality. This paper is intended to identify and discuss just three examples of externalities and their effects to the stakeholders and affected parties. Discussion An access road network might be constructed from the sugar company to various sugar belts to ease transportation of sugarcane from the farms to the company. In the minds of the initiators of such a project, their major aim is to solve the problem of inaccessibility to the remote farms. However, the resulting beneficiaries of good road services become more than predetermined. With the same road project, other farmers, who are not even for sugarcane, may benefit as they will also be able to access market easily due to well constructed roads. Those dealing in transportation of passengers and goods will also benefit with the road construction, which was not specifically meant to benefit them. This is an example of a positive externality, where the whole community around where the road has been constructed may benefit due to the construction even though the major intention of constructing the road was for something else. A paper milling factory emits gases like Sulphur Dioxide to the atmosphere during their paper processing (Armon, Duncan, & Lance, 2009). Some of the dangerous compounds are also directed to the nearby rivers as wastes to flow downstream. The result of such careless acts of the factory with time may be that the people living around the company may be affected by the gas emissions. At the same time, the people downstream may also be affected by the heavy dangerous compounds as they use the water downstream to drink, water their plants, and water their livestock since some of these compounds like Lead are heavy and take too long in the system to dissolve, hence interfering with the proper functioning of the body system. This is an example of a negative externality. The third example, which is the second negative example, is in a cement manufacturing Company where a lot of dust is emitted, and this affects the workers and the people around where the plant is located (Gene, 2001). When the workers and the people around this place inhale the dust from the factory, their breathing system gets interfered with. The dust blocks the organs like the nostril and the windpipe and eventually gets accumulated in the lungs, disabling the proper functioning of these organs. The resulting effects are difficulty in breathing and suffocation. The victims may finally die if no proper measures are taken in time. These externalities might be allowed to exist since the major projects that bring the externalities are as well important and necessary to humanity. Therefore, for positive externalities, the remedy is that subsidies may be provided by the government to promote such projects. In the case of negative externalities, the government might put heavy penalties like ban, expensive license, and regulation of waste management on the Companies that are involved so that many such Companies may not exist. Both affected parties and the stakeholders therefore have a role to play in mitigating the externalities. The government can remove waver taxes and duty charged on the materials used in the road construction in order to promote road construction. In addition, they may also offer subsidies to help in the road constructions. The affected people can also participate by maintaining the project started and making sure it does not fail to run. For negative externalities, the government should put unfriendly measures to make sure that the externalities are controlled and the affected people are compensated. Conclusion Externalities are identified by either costs or benefits they bring to the people affected, who were not the intended beneficiaries of such project outcomes. The positive externalities are benefit associated while; the negative ones are cost associated. The government and the stakeholders need to promote the positive externalities while, at the same time, try to reduce the effects of the projects that produce negative externalities through various measures. Various stiff measures and penalties are necessary to reduce negative externalities applied by the government on the stakeholders involved. On the other hand, friendly measures like subsidies are applied to promote positive externalities whose benefits cannot be excluded from the resulting users of the economic activity or project. References Armon, R., Duncan, K. F., & Lance, T. (2009). Global Warming and Economic Externalities. A Journal of the Schwartz Center for Economic PolicyAnalysis and Department of Economics , 1-22. Gene, C. (2001). The Free Market. The Mises Institute Monthly Journal , 19 (8). Read More
Cite this document
  • APA
  • MLA
(“ECONIMICS 405: Assignment2: Externalities Assignment”, n.d.)
ECONIMICS 405: Assignment2: Externalities Assignment. Retrieved from
(ECONIMICS 405: Assignment2: Externalities Assignment)
ECONIMICS 405: Assignment2: Externalities Assignment.
“ECONIMICS 405: Assignment2: Externalities Assignment”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF ECONIMICS 405: Assignment2: Externalities

ECONIMICS 405: Assignment1: Article Analysis

...ECONIMICS 405 Assignment2 Externalities... Article Analysis of the of the Contents Contents 2 Overview of the Issue 3 Model and Economic Theory3 Analysis 9 Conclusion 11 References 13 Overview of the Issue It was stated true by the famous economist Alfred Marshall that human wants are unlimited. In the study of economics, it has been stated that the most important economic problem of any country in the current world is the problem of ‘choice and scarcity.’ At this juncture, when the population level of mankind is growing at an increasing rate, the resources available for the production of various goods and services are limited. Thus, allocating resources efficiently is the major task of all the producers in the modern world. If the income...
7 Pages(1750 words)Assignment

The Issue of the Negative Externalities of the Profit Maximization Aim of the Big Corporations

...The Issue of the Negative Externalities of the Profit Maximization Aim of the Big Corporations Michael Moore addresses the issue of the negative externalities of the profit maximization aim of the Big Corporations, specifically focusing on GM in this piece of work. The syntax and tone of the essay is very sarcastic and therefore gives the impression that perhaps Moore is sensitive about the issue, and thus could have a biased approach. Moore’s most famous work has been the films ‘Fahrenheit 9/11’ and ‘Bowling for Columbia’, the former centers around the corruption and self-centered approach in politics, and the latter about the right to bear arms in the USA. In this essay, he is against the big corporations which exploit the community...
2 Pages(500 words)Essay


...The Indian Removal Act and the Trail of Tears relocated countless Native Americans throughout southeast United s. This immoral government actionsanctioned called for the forced migration to Oklahoma. A. Why did the United States government demand these Native American nations move? The Indian Removal Act was passed in the year 1830 by the then President, Andrew Jackson. The major cause for the passing of this act has been attributed to the greed for land by white settlers who wanted to expand their territory to the southern regions of the United States. These southern regions were occupied by five civilized tribes namely: Cherokee, Creek, Choctaw, Chickasaw and Seminole. Treaties were signed with these tribes... Indian Removal Act and the...
2 Pages(500 words)Essay

The Externalities of Education

...The Externalities of Education Externality refers to the loss and benefit of consuming goods and services affects the people who are actually not actually consuming the same. Therefore, externalities can be positive or negative. Education is one of the most important services in the service industry. There are two types of education service providers in the society. One is public institutions run by government and other is private institutions. Both public and private education has positive or negative externalities. Three major positive externalities of public education are educated workforce, socio cultural diversity and higher income level. Educational organizations pose a highly educated workforce and it lies in both public...
2 Pages(500 words)Essay

Interstate 405 freeway traffic

... Inter 405 Freeway Traffic The inter 405 is a significant north to south inter highway found in south California. It is commonly called the four five or 405 by the southern California residents and news media. The 405 runs along the southern and western parts of Los Angeles, starting at Irvine to San Fernando. As such, it acts as a bypass for interstate five. Therefore, the whole route is primarily referred to as the northern part of San Diego Freeway. This paper will analyse the traffic in the 405 freeway which connects Los Angeles to the valley. Subsequently, the paper will discuss how the selected part of the 405 freeway affects the urban experience, the current state of the 405 freeway and what steps should be taken to make the freeway...
4 Pages(1000 words)Essay

Humanistic and Existential Personality Theories Paper - 405

...Humanistic and Existential Personality Theories Paper – 405 Humanistic and Existential Personality Theories Paper – 405 The humanistic theory of Maslow affects individual personalities The humanistic theory of Maslow affects individual personalities to a great extent. As seen in the work of Patterson & Joseph (2007), Maslow is of the view that individuals attempt to meet their needs. It is this strive that leads to personality shaping. With the change in the individual behaviors, then the personality also changes so as to help in changing the behaviors. It is necessary to note that the individual personality goes hand in hand with their interpersonal relationships. Maslow is also of the thought that the motivation level of the individuals...
2 Pages(500 words)Essay


...MEDIA I. The media is one of the most controlling, informative and critical part of the human society. This is so because the society relies on the media to get information from other geographical areas and location which are far from the human persons in other parts of the world. Conventional wisdom and empirical evidence has pointed to the direction that the society skews its opinion towards the area which the media is alluding to. In practice, the teenagers or the young girls are not an exemption since they are also likely to follow suit and believe what the media puts forth. Most importantly, there are popular people in the world who get a lot of attention thus the whole society as a whole seeks to follow and fodder... I. The media is one ...
6 Pages(1500 words)Research Paper

Externalities in Business Economics and Oil Industry

.... Consequently, the demand has continued to exceed the supply (Cashin, 2012, p.48). Externalities in economics refer to effects the consumption of a product or service has to third parties. It is also known as spill-over (Hanson, 1974, p.39). The consumption of oil is known to have externalities in that it causes environmental pollution. The gases emitted by vehicles and from industries are known to be harmful to the environment. The pollution has resulted in diseases to human beings and has caused climatic changes. The changes in climate have had far reaching impacts on the society by causing droughts which have subjected people to poverty and hunger (Hidden costs of energy, 2010, p.70). The government has a role to play in curbing...
1 Pages(250 words)Essay

Cost-Shifting, Externalities and Their Impacts

...Discuss the meaning that cost -shifting and "externalities" have in developing countries Contents Contents 0 Introduction 0 2.Cost-Shifting and ItsImpacts 2 3.Externalities and Its Impacts 5 4.Conclusion 7 5.Bibliography 9 1. Introduction The significance of financial strategy in the emergent countries has long been acknowledged. More and more economists have confirmed that financial policy plays a decisive function in the determination of overall economical recital in the developing countries. Actually, novel pragmatic investigations recommend that macroeconomic constancy might certainly be an imperative aspect in enlightening the differentiation in factual presentation amid the developing as well as developed countries. (GREGORY...
8 Pages(2000 words)Coursework


...ASSIGNMENT 2 al Affiliation) Contents …………………………………………………… iii Introduction 2. Background…………………………………………….2 3. Discussion………………………………………..........6 4. Conclusions and Recommendations…………………...10 5. Student’s Declaration………………………………….11 6. References……………………………………………..12 7. Glossary………………………………………………..13 Images Image 1: The Waikato River System……………………………4 Image 2: The Waikato River passing through Hamilton City…..5 Abstract The government of New Zealand has made it known that it intends to sell Mighty River Power together with some other assets; Mighty River Power is the sole proprietor of the Waikato River Hydro scheme which makes use of waters of the Waikato river water to generate hydroelectric power. A number of Maori... 2 al...
7 Pages(1750 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Assignment on topic ECONIMICS 405: Assignment2: Externalities for FREE!

Contact Us