Externalities and intervention
| English | 中文 | Pinyin |
|---|---|---|
| externality/ekˈstɜːnælɪti/ | 外部性 | wài bù xìng |
| subsidy/ˈsʌbsɪdi/ | 补贴 | bǔ tiē |
A decision you can investigate
- A delivery firm saves fuel costs by using noisy scooters late at night. Neighbours lose sleep.
- The firm's accounts omit a cost borne by people outside the transaction.
Build the explanation
- An external cost falls on a third party. Social cost combines private and external costs.
- A mixed economy uses market allocation and government decisions; intervention can improve outcomes but has costs of its own.
Match the terms to their precise meanings.
Use these definitions in the particular context of Externalities and intervention.
Work through the evidence
- A per-journey charge can make the firm face part of the noise cost and reduce night deliveries.
- A time restriction targets the noise more directly, but may reduce access for customers and needs enforcement.
Why can the delivery market produce too many night journeys?
A per-journey charge can make the firm face part of the noise cost and reduce night deliveries. A time restriction targets the noise more directly, but may reduce access for customers and needs enforcement.
Test the limits
- A tax does not remove every external cost. Its effect depends on responsiveness, measurement and evasion.
- Compare policies against the actual problem, not a claim that all government action succeeds.
Which caution belongs to this particular task?
A tax does not remove every external cost. Its effect depends on responsiveness, measurement and evasion. Compare policies against the actual problem, not a claim that all government action succeeds.
The explanation in this lesson makes a conditional claim; relevant context and evidence still matter.
Compare policies against the actual problem, not a claim that all government action succeeds.
Apply and explain your answer
- Why can the delivery market produce too many night journeys?
- The firm does not face the full external noise cost in its private decision.
Choose the two statements supported by this lesson.
The concept and worked evidence support these claims; the stated limits rule out the universal shortcut.
Use the terms precisely
- externality 外部性: A cost or benefit affecting a third party.
- subsidy 补贴: A payment that supports production or consumption.
A per-journey charge can make the firm face part of the noise cost and reduce night deliveries. A time restriction targets the noise more directly, but may reduce access for customers and needs enforcement.
A tax does not remove every external cost. Its effect depends on responsiveness, measurement and evasion. Compare policies against the actual problem, not a claim that all government action succeeds.
An external cost falls on a third party. Social cost combines private and external costs.