THE QUESTION:

Watch the following video clip from Seinfeld "The Chicken Roaster." https://drive.google.com/file/d/1SBaxMW8PfOZHxEpGFZGkc3-N0axDEsj6/view?usp=sharing

"Seinfeld" is a sitcom television series from the 1990's. The show focuses on comedian Jerry Seinfeld and his three friends, George, Elaine, and Kramer and their lives in New York City.

In this episode, a new chicken place opens up across the street from the apartment building where Jerry and Kramer live.

1) How does the video clip relate to externalities?

2) Identify a concept of Externalities that is illustrated by the video clip. There are several examples.

3) Use the information from the video to support the concept you selected.

HINTS:

1) Clearly identify your example from the video as a positive externality or a negative externality and provide a reason why.

2) You could also discuss the corrective measures that take place in order to correct the externality.

3) Consider the idea of private cost, social cost, private benefit, social benefit, the market equilibrium, and the socially optimal output level.

4) Remember externalities affect a bystander (or third party), and do not apply to the individuals that take part in a given transaction, as in the buyers and sellers of the good.