U

NIVERSITY OF

M

ARYLAND

Spring 2021

S

CHOOL OF

P

UBLIC

P

OLICY

BUSSE/NRO

M

ICROECONOMICS

P

ROBLEM

S

ET

#6

Due Thursday, March 11

th

by class time

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1

1). Externality from your home town

Explain and graph one positive and one negative externality from the place where you grew up.

Be sure to explain why each would be considered an externality by microeconomics

2). Your Favorite Public Good

Discuss a public good from where you grew up, where you live now, or just out in the world today.

Explain why if left to the private market, your good would be insufficiently supplied.

3). NASA

My son and I were watching a show recently about the high cost, but exciting Apollo missions to the

moon. Defend or refute government spending on a space program based on micro logic. Or perhaps,

explain a situation where micro would be okay with space spending and one where it might not.

4). What kind of food is best?

a). Discuss and graph as best you can the advantages and disadvantages of these three different kinds

of agricultural goods.

1). Organic Foods

2). Local Food

3). Food from the general international marketplace (big economies of scale agriculture)

Do this using the models of supply and demand, profits = revenues-costs, different market structures

and the concept of externalities, and other econ models or concepts that you find useful.