Monday, July 23, 2007

Unit 2: Consumption with private benefits but with external costs: Motorhomes

From Geoff Riley's blog comes this BBC video clip
< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_6900000/newsid_6900300?redirect=6900301.stm&news=1&bbram=1&bbwm=1&nbram=1&nbwm=1&asb=1 >

a) What do you think has lead to the increasing demand for motorhomes in the UK in the last 10 years?
b) What are the private benefits and private costs of having a motorhome?
c) If you buy a motorhome, what can you say about your valuation of the private costs and benefits associated woth ownership?
d) What external costs are there asociated with motorhomes?
e) Analyse how the government could internalise the external costs for motorhome owners and evaluate how successful they would be in reducing the number of motorhomes on the road.

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