ECON 2302 Unit 7


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Unit 7: Microeconomic Issues



A.  Read the following selections from the Margin Notes by clicking on each link.


B.  Watch these presentations. When you click on one of the links below, a new screen will pop up. Use the scrollbar on the side of the new screen to navigate. You need Adobe Reader to view PDF files.


C.  (Optional) Read the following chapters from the textbook.

Chapters 12 - 14


D.  The following Optional Links will help you do better in your course but they are not required.


E.  Activity #4: New Sense Inc vs Fish Till U Drop (10 points)To Do Note

In Activity #4, you will explore one of the world's most perplexing and serious problems: How can modern man provide for the needs and wants of the world's growing population while holding damage to productive resources to a minimum?

You will look at a major debate among economists: whether the Coase Theorem or a Pigouvian tax works more effectively in cases involving environmental use and misuse.

The debate among economists currently rages stronger than ever. Pigouvians accuse Coasians of being ultra right-wing conservatives who would provide the rich and powerful with unfair advantages in the use of common or public property. Coasians claim that Pigouvians are disloyal to the fundamental economic principle that well-defined property rights always bring about the most efficient and economic use of a resource. Now it’s your turn to decide.

  1. Read about and make certain you understand the concepts on The Basics page.

  2. Read about the situation at Lake Smiley. As you read, look for examples of the concepts.

  3. Look at two different opinions concerning how such pollution problems might be solved.

  1. Decide which method – Coase Theorem or Pigouvian taxes – would provide the best solution for cleaning up Lake Smiley and why.

  2. Write a brief essay explaining which solution you chose and why. Be careful to apply (at the least) the concepts on The Basics page – market failures, public goods, externalities and etc. (Application does not mean you throw in a word or definition at some point ... it means you connect them to the situation. There are examples in the Lake Smiley story of each of the basic concepts and you should be able to identify them.)

  3. Your essay should be thorough, specific, include relevant concepts from the course material and be free of spelling and grammar errors.


Activity Submission Instructions

By the deadline shown in the Course Schedule on the main page of the syllabus:
  • Send your essay in the body of a new email to

  • Put only your name and Activity #4 at the beginning of your email.

  • Be careful to use the correct subject line.

  • Late essays will lose one point per day late, including weekends and holidays.



Copyright 1996 Amy S Glenn
Last updated:   02/14/2018   0130

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