Does the gender of the seller affect the price buyers are willing to pay?

The article says, "Yes": https://www.theguardian.com/science/2016/feb/19/ebay-study-shows-online-shoppers-are-subconsciously-sexist.

Questions.

1. Does the evidence indicate that buyers are irrational? If not, what other explanations exist?
2. How could a savvy buyer take advantage of these differences in price?

Will the latest attempt to collude in the oil market succeed?

Saudi Arabia, Russia, Qatar, Venezuela Agree to Freeze Oil Output
by: Summer Said and Benoit Faucon
Feb 17, 2016
Click here to view the full article on WSJ.com

TOPICS: Cartels, Oil Markets

SUMMARY: Saudi Arabia and Russia, the world's two largest crude-oil exporters, said Tuesday they would halt production increases as long as other major producers followed suit, but prices fell anyway as investors looked for more concrete action to reduce the global glut of petroleum.

CLASSROOM APPLICATION: Students can evaluate the recent commitment and strategy by Saudi Arabia, Russia, Qatar, Kuwait, and Venezuela to cap oil production. The commitment is contingent on other OPEC members, notably Iran and Iraq, following suit. Involved in the evaluation is the reasons that Iran and Iraq have for increasing oil production.

QUESTIONS: 
1. (Introductory) Why are Saudi and Arabia and Russia pushing OPEC members to halt increases in oil production?

2. (Advanced) Why have Iran and Iraq recently increased oil production? Are the two countries likely to halt increasing oil production?

3. (Advanced) What is Saudi Arabia's traditional role in OPEC? What was Saudi Arabia's rationale for abandoning this role in the recent past?

4. (Introductory) Why did the U.S. producers in the past year cut back on oil production?

Reviewed By: James Dearden, Lehigh University

More evidence that firms operate when average total cost > price > average variable cost and shut down when price < average variable cost

More Cuts Loom as Oil Nears $25
by: Erin Ailworth and Bradley Olson
Feb 12, 2016
Click here to view the full article on WSJ.com

TOPICS: Oil Markets, Production

SUMMARY: As crude prices slide toward $25 a barrel, many oil companies have little choice but to start making the steep cost cuts they have avoided up until now, jettisoning every well that can't break even or isn't needed to keep the lights on.

CLASSROOM APPLICATION: In the context of this oil case, students can evaluate two economic principles: the shut-down point and a firm's optimal level of employment. Students can evaluate the reason why oil producers are operating despite losses and the reason why the producers are laying off workers.

QUESTIONS: 
1. (Introductory) U.S. and Canadian producers are losing at least $350 million a day at current prices, according to an AlixPartners analysis. Should all producers that are losing money be shutting down operations? Characterize the oil price at which a producer should shut down.

2. (Advanced) Why are oil companies laying off workers? Use the wage rate and the concept of the marginal revenue product of labor for a given type of job in answering the question.

3. (Advanced) John England, vice chairman of energy for Deloitte LLP, is advising energy clients trying to stave off bankruptcy to go ahead and make the steep cost cuts they would have to if forced to declare. How does the potential prospect of bankruptcy affect a firm's decision to make steep cuts in costs?

Reviewed By: James Dearden, Lehigh University

Resources on the web for incentives

1. Watch this humorous clip to see Captain Ron use incentives to induce good effort.
2. Watch this humorous clip from Office Space to see how incentives, or the lack of them, affects behavior.
3. Watch this clip from the Stand Up Economist @ 3:15. It mocks the principle that people respond to incentives?

A review of a book critical of the ACA

http://www.realclearmarkets.com/articles/2016/02/16/book_review_sally_pipes_the_way_out_of_obamacare_102007.html

The article says that the attempt to use price controls to limit the increase in cost has failed.

The article is a good introduction to a discussion of whether markets or command and control is the best way to organize economic activity.

Answers from a student to review questions in Chapter 4 of Mankiw

These are the review questions a student answered in chapter four. Add a comment if you see any errors. 

Problems and Applications

1) Cold snap hits florida
a. Price rises because supply of oranges decreases and shifts to the left 
Weather turns warm in new england
b. Price of hotel rooms plummets because demands decreases and shifts to the left 
War breaks out in the middle east and gas rises and used caddys fall
c. Price of gasoline rises because supply is decreased so it shifts to the left and used caddys fall because the demand is decreased and shifts to the left because the supply of gasoline decreased.
3)Minivans and the effects
d. More children means the demand for mini vans increases and shift to the right
e. Steel prices rises so supply is decreased 
f. Engineers develop new automated machinery that increases the supply of mini vans shifts to the right
g. Price of sports utility vehicles rises 
4) Compliments
• dvds and tv screens our compliments 
• dvds and movie tickets our subs
• tv screens and movie tickets our subs
b. as the technological advance reduces the cost of manufacturing TV screens the supply would increase because you can create more tv screens at the same cost as before.
5) It created more supply of computer chps which brought the price down on computer chips and computer chips compliment computers so therefore the price of computers went down as well. 
6)
a. increases supply
b. increased demand
c. increased demand of exercised attire
d. supply increases
10) Supply decreased because something affected price. 

Gasoline for $1 a gallon?

Gas at $1 a Possibility for Parts of the U.S. 
by: Alison Sider
Feb 09, 2016
Click here to view the full article on WSJ.com
Click here to view the video on WSJ.com 

TOPICS: Oil Markets, Supply and Demand

SUMMARY: Gasoline could return to $1 a gallon for the first time since the 1990s amid the continuing decline in crude-oil prices, a growing fuel glut and seasonal refining shifts.

CLASSROOM APPLICATION: Students can evaluate the causes of low gasoline prices, the effect of falling gasoline prices on the quantity of gasoline demanded, and the reasons why gasoline prices vary across the states.

QUESTIONS: 
1. (Advanced) What factors are causing gasoline prices to fall? Include OPEC, refinery capacity, and the performance of the Chinese economy in the explanation.

2. (Advanced) How do state taxes, distance to refineries, and state environmental regulations affect local gasoline prices? Why is Texas a good candidate for ultracheap gasoline?

3. (Introductory) What is the effect of the price of gasoline on the equilibrium quantity of gasoline demanded? Does a decrease in the price of gasoline cause a shift in the demand for gasoline?

Reviewed By: James Dearden, Lehigh University

What creates demand?

This article reports that what is the consumer's head determines how much he or she is willing to pay for the item, not necessarily its intrinsic characteristics.

http://qz.com/614214/what-the-diamond-industry-is-really-selling/

Supply and demand in action in the market for califlower

http://managerialecon.blogspot.com/2016/02/a-cauliflower-bubble.html

A good article on the reasons to support and to oppose free trade

http://www.bloombergview.com/articles/2016-01-26/free-trade-with-china-wasn-t-such-a-great-idea

Good video on why standards of living grow rapidly in some countries and slowly in others

http://mruniversity.us10.list-manage2.com/track/click?u=04a951a4045e64f9ee2a762fd&id=e3632f20ad&e=8886654bda

Optional material for L12b

1. This blog has examples of low rents paid for some apartments in NYC.
2. This paper reports vacancy rates for apartments in NYC.
3. This paper reports that the vacancy rates for apartments in NYC is lower than the national average.

More optional material for L09

1. This story from Planet Money illustrates supply and demand at work. It shows how the price of a ride on Uber increases during a snowstorm.
2. Read the article linked from this post: Pig market.  It discusses the effects of a virus that is killing young pigs and lower grain prices on the price of pork.
3. This article reports that the price of tickets to the Super Bowl is falling. The forecast today, 1 week out, is for temperatures between 35 and 30 with a 20% chance of precipitation. Perhaps that forecast makes watching the game (and the commercials) in the comfort of your home on your new big TV look better and better.
4. This article in the WSJ reports that propane prices rose as temperatures fell. It is a good introduction to supply and demand. It links higher prices to higher demand, mentions possible shortages, and has at least one example of a reduction in the quantity demanded.
5. This video shows how changes in demand affect the price of Hula Hoops.

Optional material for L09

1. Foodie on Equilibrium. It is a clear exposition of demand, supply, and equilibrium.
2. 1funkyteacher on demand and supply, and equilibrium. It uses auction for cows in an excellent illustrations of demand, supply, and equilibrium.
3. 1funkyteacher on changes in equilibrium. It discusses the market for natural gas and shows that price increases as supply decreases and demand increases. It also discusses why “rigging” the market may be difficult and how suppliers did so in the 2000s.
4. The Economic Detective’s video on supply and demand. This is a clear exposition of demand, supply, and equilibrium.
5. This story from from Planet Money illustrates what happens when prices do not adjust to shortages. It describes the backlog (backlog=shortage) of packages at UPS and FedEx during the Christmas season. “Surge” pricing could have eliminated the backlog; the backlog occurred because the quantity demanded exceeded the quantity supplied.
6. In this essay, Gary Becker and Julio Elias estimate that the shortage of kidneys would disappear if the price increased to something between $15K and $30K. About 4,000 people a year in the US die while waiting for a kidney transplant and another 1,200 are removed from the waiting list because they become too sick for a successful transplant. See also Becker,  Gary S. and Julio Jorge Elías (2007), “Introducing Incentives in the Market for Live and Cadaveric Organ Donations,” The Journal of Economic Perspectives, Vol. 21, No. 3 (Summer, 2007), pp. 3-24.

Optional material for Choice

1. Watch this clip.  (The instructor predicts that you will laugh.) Is the monkey that rejects cucumber rational?
2. Watch this clip. It shows a consumer considering whether to pay a higher price to buy American. The marginal benefit is obtaining a US-made product instead of one made in India. The marginal cost is $212. It is a good example of making a decision by comparing the benefit and cost.
3. Watch the 60-second lesson beginning @ 5:30 to learn about Rational Choice Theory
4. Watch this humorous clip from Jerry McGuire. What motivates the football player?
5. Watch this clip from the Stand Up Economist @ 2:35. It mocks the principle that people are rational.

Optional material for L03

1. Watch the first 60-second lesson: The Invisible Hand
2. Watch Kahn on Adam Smith @ 0:00-4:30.
3. Watch this clip from Home Town Story @ 37:00. A businessman states that he is interested in profit. He goes on to discuss that customers also seek profit (economists call this second profit consumers surplus) and that the mutually attainment of profit leads to good results.
4. Read this post to learn read how consumers are responding as the price of natural gas falls. Did they need the government to tell them to convert? Why or why not?
5. Watch this clip. It shows that no one knows how to make a pencil and explains why the market is miraculous and government control is inefficient.
6. This story describes aggregating what many people know, each of whom may know much about some things and little about other things, leads to better decisions than trying to have one person or group know everything.
7. Watch Friedman talk about how markets lead to cooperation and harmony to produce a  pencil.

Optional material for L04

1. Read this article (2 pp.) that summarizes recent evidence on the percentage of people in a country that have paid a bribe, a form of corruption.
2. This video describes corruption in Russia associated with the Sochi Olympics. It illustrates one reason why the Heritage Foundation rates the level of economic freedom in Russia as "Mostly Unfree."
3. This chart reports statistics on the ease of starting a business in countries. Ease of starting a business is one indicator that the economy relies heavily on markets.
4. Watch this video for a short account on Puritans in New England. It has great quotes from Governor Bradford about the problems with the communal system.

Optional material for L07

1. Foodie on Demand. This is an excellent slideshow.
2. Watch this clip from Confessions of a Shopaholic. It illustrates well how low prices affect the quantity demanded.
3. Read this post to learn how consumers are responding as the price of natural gas falls.
4. Read this article and this article to learn how consumers are responding as the price of cigarettes increases.
5. This story describes what economists call diminishing marginal utility and a reason that price must fall in order to induce an individual consumer to buy more.
6. This article from the WSJ describes some of the effects of subsidizing gasoline in Venezuela. An interesting point is that folks there use 7 times as much gasoline as neighbors in Columbia.

Optional material for L06

1. Watch this video account of protests over the 1999 WTO meetings in Seattle (7:44). It is the first of a three part series.
2. This report makes the case for free trade and addresses some objections commonly made by critics of free trade.
3. This report makes the case against free trade.
4. This opinion argues that “Democrats want trade, and we want more of it. But like the majority of Americans, we want fair trade, not trade agreements that shutter American manufacturing facilities and ship jobs overseas.”
5. This clip from the Stand Up Economist beginning @ 4:00.
6. this 60-second adventure in economics beginning @ 3:23.

Putting a price on carbon reduces carbon emissions

http://www.nytimes.com/2016/01/19/opinion/proof-that-a-price-on-carbon-works.html?ref=opinion&_r=0

What happens to price on the black market when the government closes the white market?

http://www.bbc.com/news/blogs-news-from-elsewhere-35325840

Want to be stinking rich

http://www.slate.com/blogs/moneybox/2014/09/29/lifetime_earnings_by_college_major_why_economics_grads_make_bank.html

Pollution in China

http://priceonomics.com/why-is-the-pollution-so-bad-in-beijing/

Why haven't the supermines shut down?

Supermines Add to Glut of Metals

by: John W. Miller
Jan 05, 2015
Click here to view the full article on WSJ.com

TOPICS: Production, Supply and Demand

SUMMARY: Giant mines, begun when prices were high, are adding to the oversupply of copper, iron ore and other metals, compounding the woes of the depressed mining sector.

CLASSROOM APPLICATION: With an increase in the supply of copper due to the startup of new supermines, prices of metals and iron ore have declined. As a result, mining companies have not shut down mines, but rather have kept them operating and reduced labor inputs. The article notes that while profit margins are declining, prices continue to be above shut-down prices. "The mine's huge scale keeps its operating costs down, at under $1.50 per pound. That means even with copper prices now just above $2 a pound, a six-year low, it will continue to make money on an operational basis."

QUESTIONS: 
1. (Introductory) What is the effect of the opening of supermines on the prices of metals and iron ore?

2. (Advanced) What is the effect of depressed metals and iron ore prices on the profit margins of mining companies? Are the companies currently losing money? If so, then why are the mining companies continuing to operate?

3. (Advanced) The article states: "The big mines cost so much to build and extract minerals so efficiently that mothballing them is unthinkable-running them generates cash to pay down debts, and huge mines are expensive to simply maintain while idle." Is "the big mines cost so much to build" a good rationale for not shutting them down in the short run? Discuss the effect of fixed costs on operating decisions.

Reviewed By: James Dearden, Lehigh University

China plans to use cap-and-trade to limit carbon emissions

http://www.cnbc.com/2015/09/24/china-to-limit-greenhouse-gas-emissions-in-cap-and-trade-program.html

Two videos on MR=MC and Perfect Competition

Mr. Clifford on MR=MC for perfect competition
Kahn on MR=MC for perfect comp

Crony capitalism not = the market system

http://www.bloombergview.com/articles/2015-12-24/cronyism-causes-the-worst-kind-of-inequality

Neumark on the employment impact of an increase in the minimum wage

http://www.wsj.com/articles/the-evidence-is-piling-up-that-higher-minimum-wages-kill-jobs-1450220824

If a 10% increase in the minimum wage reduces teen-age and low-skill employment by 2%,

1. What is the price elasticity of the demand for labor?
2. What would happen to the unemployment rate for teen-age and low-skill workers when the minimum wage increases from $7.15 to $10.10? Assume that no workers become discouraged and drop out of the labor market?

Do we need death panels?

Scarcity of health care implies rationing of health care. Here are a couple of opinions that discuss the best ways to ration health care.

http://www.nytimes.com/2012/09/17/opinion/health-care-reform-beyond-obamacare.html?smid=tw-share&_r=2

http://www.nytimes.com/2012/08/22/business/economy/rationing-health-care-more-fairly.html?_r=2&pagewanted=all

Comparative advantage works in microbial economies

The Numbers. Economies of Ail: Bacteria Flourish
by: Jo Craven McGinty
Dec 12, 2015
Click here to view the full article on WSJ.com

TOPICS: Microeconomics

SUMMARY: Columnist Jo Craven McGinty explores how a chance conversation between two former roommates led to a breakthrough in the understanding of how microbial communities interact-and an affirmation of economic theory.

CLASSROOM APPLICATION: Instructors can use the article as an example in a microbial population (or economy) of comparative advantage, and the article's diagram shows a good analogy between countries trading wine and shirts and cells trading metabolites. The article also notes general equilibrium, and it reports on an experiment using microbes to test specialization and gains from trade. "Economists love this kind of study, Colin Camerer, professor of behavioral economics at California Institute of Technology, said, because it shows an economics principle functioning as anticipated in a simple system where economists didn't suspect the rules applied."

QUESTIONS: 
1. (Advanced) The column notes "comparative advantage." Define comparative advantage. Is the trading metabolites among microbes pictured in the column an example of microbes exploiting comparative advantage?

2. (Introductory) The column notes "general equilibrium." Define general equilibrium and explain how it could apply to microbes trading multiple types of metabolites.

3. (Advanced) "In their experiment, the researchers documented a tradeoff between the species' growth and relative abundance in the overall microbial population based on their level of cooperation. The more a community shared, they found, the faster it grew-but the species that shared the most accounted for a smaller fraction of the total population, and eventually the benefit evaporated if the species 'overshared.'" Is it possible that in human economies that oversharing could happen, thereby leading to lower economic growth?

Reviewed By: James Dearden, Lehigh University

Data on CO2 emissions in the US.

https://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=90&pid=45&aid=8&cid=US,&syid=1980&eyid=2012&unit=MMTCD

How to put teeth into a climate change agreement

http://www.theguardian.com/environment/2015/dec/12/james-hansen-climate-change-paris-talks-fraud

The Maple Syrup Cartel

http://qz.com/570828/canadas-mighty-maple-syrup-cartel-wants-to-put-this-grandmother-in-jail/

http://www.bbc.com/news/business-35028380

Is Finland's approach to reducing poverty better than welfare or minimum wage?

http://managerialecon.blogspot.com/2015/12/why-is-finland-is-giving-every-adult.html

Is Econ 101 wrong?

Here is a nice debate: http://gregmankiw.blogspot.com/2015/11/debating-introductory-econ.html

Externality at work

http://www.theguardian.com/environment/2015/dec/07/beijing-pollution-red-alert-smog-engulfs-capital

An example of a the difficulty a cartel has in raising price

http://uk.reuters.com/article/uk-opec-meeting-idUKKBN0TL0MB20151203

Should local government require licenses for occupations?

Opinion. Wisconsin Moves to Rein in the Licensing Game
by: Luke Hilgemann
Oct 31, 2015
Click here to view the full article on WSJ.com

TOPICS: Labor Economics

SUMMARY: Barring municipalities from passing laws that discourage jobseekers and keep entrepreneurs out. "At first glance, occupational licenses might seem like small potatoes. But these regulations force jobseekers and entrepreneurs to acquire government approval before entering their chosen profession-a process that requires time, training, money or all of the above. Intended to ensure quality, occupational licenses are often little more than a barrier to employment that harms low-income communities the most."

CLASSROOM APPLICATION: Students can evaluate whether occupational licensing create barriers to entry into occupations and result in higher prices of services provided by licensed occupations. They can examine how economists would determine the occupations in which the benefits of licensing do not outweigh the costs.

QUESTIONS: 
1. (Introductory) What are the benefits of occupational licensing?

2. (Advanced) What is the effect of occupational licensing on the prices of services provided in industries with occupational licenses?

3. (Advanced) What is the effect of occupational licensing on the ability of workers to enter occupations?

Reviewed By: James Dearden, Lehigh University

Should the government tax soda to induce me to avoid drinking sugar?

http://www.politico.com/story/2015/11/war-over-soda-taxes-coming-to-a-polling-place-near-you-216216

The debate over minimum wage

Studies and opinions about the minimum wage fall into three broad categories: the effects are hard to estimate, the effects are bad, and the effects are good.

The effects are hard to estimate

1. This is a history of minimum wage in the US.
2. The CBO estimates that the impact of raising the minimum wage to $10.10 on employment ranges from a slight decrease to a loss of 1 million jobs. The best estimate is implementation would reduce employment by 500,000 (and increase the unemployment rate by about 0.3%). It states, "Many more low-wage workers would see an increase in their earnings. ... The increased earnings for low-wage workers resulting from the higher minimum wage would total $31 billion, by CBO's estimate. However, those earnings would not go only to low-income families, because many low-wage workers are not members of low-income families. Just 19 percent of the $31 billion would accrue to families with earnings below the poverty threshold, whereas 29 percent would accrue to families earning more than three times the poverty threshold, CBO estimates."
3. This article reports that President Obama issued an executive order raising the minimum wage for federal contract workers to $10.10. Would this increase tend to increase unemployment in the federal contract worker labor force? Who bears the extra expense of the higher wage? The article is a good introduction to the debate over the minimum wage and the difference in incentives facing government and private business.
4. The debate on minimum wage on Intelligence Squared. 
5. This story from Planet Money is a nice discussion of the disagreement in the estimates over the impact on unemployment of raising the minimum wage.

The effects are good.

1. This paper from the Center for Economic and Policy Research says that the minimum wage has no discernible impact on unemployment. 
2. In this video John Green argues in favor of minimum wage legislation.  A key point is that increasing the minimum wage by 10% reduces the number of people living in poverty by 2.5%. His statement that increasing the minimum wage is the “cheapest lunch available” for reducing poverty without increasing unemployment is probably incorrect; most economists agree that an earned income tax credit is a more effective way to reduce poverty.
3. This slideshow. It has 25 facts about the minimum wage.

The effects are bad.

1. This study says that minimum wage increases unemployment among 16-30 year-olds who did not finish high school. This group is likely to have low job skills.
2. This video is not a fan of minimum wage.
3. David Henderson on the minimum wage. He is not a fan.
4. Thomas Sowell on minimum wage. He is not a fan.
5. This paper reports that the gap between nationwide unemployment rates for whites and blacks began around 1940.
6. Fee does a nice job describing the decision employers face when deciding whether or not to employ someone and asks why not raise the minimum wage to $100 if raising it to $10 is good. 
7. A clip from John Stossel on the minimum wage. He is not a fan.
8. Read this article (1 p.). It reports that unemployment for young workers in New Zealand increased in 2008 following an increase in the minimum wage there.

TPP

Supply and demand in action in the farmland

Farmland Prices Decline Across Parts of Midwest
by: Jesse Newman
Nov 13, 2015
Click here to view the full article on WSJ.com

TOPICS: Supply and Demand

SUMMARY: Farmland values fell in parts of the Midwest in the third quarter, reflecting a downdraft in the agricultural sector driven by three years of lower crop prices, according to Federal Reserve reports.

CLASSROOM APPLICATION: Students can use supply and demand to analyze the reasons for decreases in the prices of farmland in the Midwest.

QUESTIONS: 
1. (Introductory) What factors have caused recent decreases in the prices of farmland in the Midwest?

2. (Advanced) What is the effect of a drought on the demand for farmland? What is the effect of a drought on the supply? Is it possible that droughts result in a decrease in the price of farmland?

3. (Advanced) What is the effect of ethanol regulations (i.e., ethanol requirements in gasoline) on the prices of farmland?

Reviewed By: James Dearden, Lehigh University

One less barrier to entry

Anti-Licensing Movement Scores a Victory
by: Eric Morath
Nov 14, 2015
Click here to view the full article on WSJ.com

TOPICS: International Trade, Regulation

SUMMARY: Fitness trainers in the nation's capital city, led by a push from CrossFit, look set to pull off a feat that has eluded the White House and a number of libertarian groups: stopping the spread of occupational licenses.

CLASSROOM APPLICATION: Students can examine the effect of licensing on barriers to entry and wages in occupations. They can also evaluate the reasons why workers in licensed occupations support licensing and discuss the potential benefits of licensing.

QUESTIONS: 
1. (Introductory) What is the effect of occupational licensing on entry into an occupation?

2. (Advanced) Is occupational licensing equivalent to creating a professional monopoly?

3. (Advanced) What are the advantages and disadvantages of occupational licensing? What criterion and methodology would an economist use to determine whether a profession should be licensed?

Reviewed By: James Dearden, Lehigh University

L24-Public Policies towards Pollution

Here are some optional readings and videos.

1. This article reports that the Pope's encyclical on climate change states, "The strategy of buying and selling emissions credits can give rise to a new form of speculation and would not serve to reduce the global emission of polluting gas. This system seems to be a quick and easy solution with the appearance of a certain commitment to the environment, which however does not imply by any means a radical change in the scale of circumstances. Thus, it may become an expedient that supports continued excessive consumption by certain countries and sectors."
2. Watch MRUniversity A Deeper Look at Tradeable Allowances. It includes a nice comparison of using taxes to reduce pollution with using cap and trade. EcoGeek on cap and trade, carbon. He discusses some of the common arguments against cap and trade.
3. Environmental defense fund on cap and trade, sulfur dioxide. It doesn't describe how the government creates the cap. It does discuss that cap and trade achieves a given reduction in pollution at a lower cost than command and control.
4. This article is a nice summary of carbon taxes around the world.
5. This article is a nice definition of a carbon tax and its effects.
6. Video: Carbon Tax from Australia,
7. Clip on cap and trade. It talks about how the UN distributes permits to emit CO2 to countries who signed the Kyoto Protocol. The US did not sign the Kyoto Protocol.
8. Annie Leonard is not a fan of cap and trade

Older posts on externalities

http://edlikeseconomics.blogspot.com/search/label/Externalities

Examples of negative externalities

A lake that burns
This report from Reuters describes air pollution in Beijing.

This clip describes air pollution in the US and in Los Angeles in particular.

This clip from Erin Brockovich is a good example of externalities.

Barriers to entry in the Internet Economy

Facebook, Amazon and Other Tech Giants Tighten Grip on Internet Economy 
by: Don Clark and Robert McMillan
Nov 06, 2015
Click here to view the full article on WSJ.com

TOPICS: Internet

SUMMARY: Computing hardware has long served as the critical backbone of business operations. Today, the Internet economy is powered by an infrastructure that has become virtual, and is controlled by a small handful of tech giants.

CLASSROOM APPLICATION: Students can evaluate the effect of economies of scale and network externalities (which are not mentioned in the article) on barriers to entry and ultimately the market power of the noted tech companies.

QUESTIONS: 
1. (Introductory) Evaluate this statement in terms of economies of scale and barriers to entry into the relevant industries: "All of these companies are operating in industries where scale is rewarded and where there is a very high level of capital intensity required to even hope to compete," said Karl Keirstead a senior analyst with Deutsche Bank Securities.

2. (Advanced) Evaluate this statement in terms of the market power of tech firms: "These companies are delivering online search, messaging, advertising, applications, computing and storage on demand-which has positioned them not only to empower business but to extract extraordinary value as it grows." Interpret "positioned them" in terms of economies of scale and barriers to entry.

3. (Advanced) Define "natural monopoly" and "network externalities." Do economies of scale and network externalities in the noted tech industries drive barriers to entry and ultimately the market power of the established players in these industries?

Reviewed By: James Dearden, Lehigh University

TPP

Details of Pacific Trade Pact Fuel Debate
by: William Maudlin
Nov 06, 2005
Click here to view the full article on WSJ.com

TOPICS: International Trade

SUMMARY: A public battle brewed over whether to ratify the sweeping Pacific trade agreement that the U.S. concluded with 11 countries, after details of the deal were released. Related article: A currency pact accompanying a Pacific trade agreement unveiled Thursday will give Washington new tools to prevent trading partners from manipulating currencies to gain trade advantage, U.S. Treasury Secretary Jacob Lew said.

CLASSROOM APPLICATION: Students can analyze the potential winners (exporters and labor employed in export industries in member countries, and consumers) and losers (importers in member countries and labor employed in import industries) of the Trans-Pacific Partnership. Students can also examine the effect of the agreement on the environment.

QUESTIONS: 
1. (Introductory) Who are the winners and losers of the TPP identified in the article?

2. (Advanced) What is the concern of U.S. labor unions about the TPP?

3. (Advanced) Why are some Republicans opposed to the TPP?

4. (Advanced) Why are environmental groups opposed to the TPP?

5. (Advanced) What is the issue of "currency abuse" in the context of international trade?

Reviewed By: James Dearden, Lehigh University

A good example of a near monopoly (80% market share)

Luxottica produces about 80% of the frames for sun- and eye glasses. Moreover, it has achieved this dominant position with little help from the government, as far as I can tell. Here is an excellent account of the predictable effects: http://www.forbes.com/sites/anaswanson/2014/09/10/meet-the-four-eyed-eight-tentacled-monopoly-that-is-making-your-glasses-so-expensive/.