Friday, January 26, 2007

Unit 2: Negative externalities; lung disease

Read the article below and watch the video clip

http://news.bbc.co.uk/1/hi/health/6297701.stm

< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_6300000/newsid_6301000?redirect=6301027.stm&news=1&bbwm=1&nbwm=1&bbram=1&nbram=1 >

a) Why is this lung damage an example of a negative externality?
b) Suggest 3 possible actions the government could take to correct this market failure
c) Suggest one drawback to each method you suggest

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