Using the Google Draw tool (or a tool of your choice), begin by illustrating a market for paper that contains the following:

• Private Supply Curve (S Private)
• Private Demand Curve (D Private)
• Equilibrium Price (P Private)
• Equilibrium Quantity (Q Private)

2.Does the market for paper production have a positive externality or a negative externality? Explain why. Be sure to include the definition for the type of externality you chose.

3. Next, represent the externality in your graph.

• Correctly illustrate the externality by adding either a Social Supply Curve OR a Social Demand Curve to your graph.
• Label the new equilibrium
• • Equilibrium Price (P Social)
  • Equilibrium Quantity (Q Social)

4.Name one way the government might help correct for this externality.

PART 2: Consider the market for home landscaping (think flowers and a neatly kept yard) that brings benefits to both private consumers and social benefits as well.

5. Using the Google Draw tool (or a tool of your choice), begin by illustrating a market for home landscaping that contains the following:

• Private Supply Curve (S Private)
• Private Demand Curve (D Private)
• Equilibrium Price (P Private)
• Equilibrium Quantity (Q Private)

6.Does the market for home landscaping create a positive externality or a negative externality? Explain why. Be sure to include the definition for the type of externality you chose.

7. Next, represent the externality in your graph.

• Correctly illustrate the externality by adding either a Social Supply Curve OR a Social Demand Curve to your graph.
• Label the new equilibrium
• • Equilibrium Price (P Social)
  • Equilibrium Quantity (Q Social)

8. Name one way the government (or community) might help correct for this externality.