ECO 202
 Module 4 - Course Objectives

 Externalities

 9.1   Explain why negative externalities lead to inefficient overproduction and how property rights, pollution charges, and taxes can achieve a more efficient outcome.

 9.2  Explain why positive externalities lead to inefficient underproduction and how public provision, subsidies, vouchers, and patents can achieve a more efficient outcome.

Assessment  Method

A.  Do the Self-Test questions in your Study Guide as if they were real exam questions, which means do them without looking at the answers. 

B.  You will learn the most from right answers you had to struggle for, and from your wrong answers and mistakes.  Only after you have attempted all the questions should you look at the answers in your Study Guide. 

C.  When you check your answers, be sure to understand where you went wrong and why the right answer is correct.

Take Self-Test 9.1, and Self-Test 9.2 in your Study Guide before taking Exam #1.