IB Economics HL 2.8.2 Externalities & welfare loss
IB Economics HL 2.8.2 Externalities & welfare loss
Students practise explaining market failure due to externalities by drawing and labelling externalities diagrams and linking them to real-world cases like fossil fuels or…
How this is tested
- draw a negative production externality diagram with MSC above MPC and welfare loss
- explain how merit good underprovision creates welfare loss when MSB exceeds MPB
- apply an externalities diagram to show how bounded self-control in gym membership markets leads