a)We have heard of too many accidents when huge oil tankers (vessels) engaged by oil suppliers spill oil into the ocean. Is this an example of External Cost or External Benefit, ceteris paribus? Explain why.

b)Explain if action taken by the Government to manage this industry will shift the demand curve (or supply curve?) and how this affects resources allocated (used by) this industry.(Drawing and using your own demand/supply model may be helpful).

a) Does the decision by members of a community to cycle to work/school give External Cost or External Benefit, ceteris paribus? Should the Government try to increase (or decrease?) more people to do that? Explain why.

b) Explain if action taken by the Government will shift the demand (or supply?) curve and how this affects resources allocated (used by) industries associated with cycling.(Drawing and using your own demand/supply model may be helpful).