Outcome: Government Involvement and Externalities

What you’ll learn to do: analyze the efficacy of government policies to lessen negative externalities and analyze how the government promotes positive externalities

With an understanding of what exactly positive and negative externalities are, we can now examine how the government attempts to promote positive externalities while keeping the negative externalities at bay.


The learning activities for this section include the following:

  • Reading: Command-and-Control Regulation
  • Reading: The Benefits and Costs of U.S. Environmental Laws
  • Reading: How Governments Can Encourage Innovation
  • Self Check: Government Involvement and Externalities

Take time to review and reflect on each of these activities in order to improve your performance on the assessment for this section.