marksurnin Posted January 31, 2013 Report Share Posted January 31, 2013 Heyy everyone,So, I am writing my Economics commentary on negative externalities of consumption of alcohol and tobacco. As far as I know, I need 3 diagrams to evaluate and to support my argument. So far, I have only included a diagram about the negative externalities and the market failure. I need 2 more diagrams, do you guys have any ideas about what else I can talk about?Thank you so much! Reply Link to post Share on other sites More sharing options...
Fermat Posted January 31, 2013 Report Share Posted January 31, 2013 You can talk about what the govt. can do to reduce the externality. For example what will happen if the govt. increases the taxes on alcohol. Also you could talk about if the goods are elastic/ inelastic and draw the diagram showing it. 1 Reply Link to post Share on other sites More sharing options...
Nabz Posted January 31, 2013 Report Share Posted January 31, 2013 (edited) As the above post mentions, you can show how government can impose a tax onto the alchohol which would result in the MSC curve to the right, shrinking the space between MPC and MSC thus the welfare loss would be smaller... Edited January 31, 2013 by shad0wboss Reply Link to post Share on other sites More sharing options...
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