Tuesday, March 28th, 2006

Market Failures: Externalities


Students shall be able to

  1. define externality.

  2. define positive externality.

  3. define negative externality.

  4. list examples of positive externalities.

  5. list examples of negative externalities.

  6. explain how a positive externality results in the underallocation of resources.

  7. explain how a negative externality results in the overallocation of resources.



  1. Lecture/discussion: Market Externalities - Le Chic and the View at the Beach

  2. Students shall answer a series of thought questions.


  1. Take notes on the lecture, as directed.

  2. Answer these questions on the left side of your notebook. [Password: armchair]



Monitor and adjust as necessary. Check student notes in the notebook.

TEKS involved: 2B, 2C, 2D, 3B, 4A, 4B, 5A, 5B, 7A, 7B, 15A, 15B, 17A, 20A, 20B, 21A, 21B, 23B, 23D, 24A, 24B, 24C, 24D,