Negative Externalities And The Effect On The Perception Of...

Introduction Telling the reader what the essay is about and a brief overview of the different components of the essay. This part is critical to capture the interest of the reader. This paper will cover what falls under the general category of externalities, an externality arises when a person engages in an activity that influences the well-being of a bystander but neither pays nor receives compensation for that effect. If the impact on the bystander is contrary, it is called a negative externality, on the other hand, if it is beneficial, it is called a positive externality. I will explain how microeconomic tools and materials we have covered this semester apply towards externalities and then follow on to its historical analysis. Then I will take it back to the role of the government with externalities which will then lead to how externalities are relevant in my daily life as a student at Cal State Dominguez Hills and why it is important to my readers to understand why. Society’s interest i n a market result ranges beyond the well-being of buyers and sellers who contribute in the market. The market equilibrium is not effective when there are externalities because buyers and sellers neglect the outside effects of their actions when determining how much to demand or supply. That is to say, the equilibrium fails to exploit the total benefit to society as a whole. Descriptive Section Apply microeconomic tools and materials discussed in class to help the reader understand the