Lesson 6: Who Should Pay for Progress?
Last Lesson
Lesson 5
Who controls economic power?
Lesson duration is: 70 minItems in this lesson
Last Lesson
Lesson 5
Who controls economic power?
Is Monopoly Always Bad?
Agree or disagree, give a argument and counterargument
Claim 1:
“Monopolies are always bad because consumers have no choice.”
Claim 2:
“A monopoly can sometimes be more efficient than having many competing firms.”
Natural monopoly = A market where one large firm can produce at a lower average cost than several competing firms because of very large economies of scale.
Possible examples for discussion:
water networks
electricity networks
railway infrastructure
Should society create competition if competition makes the product more expensive?
competition ↔ efficiency
consumer choice ↔ economies of scale
Who controls economic power?
Complete the sentence:
“Economic power should be controlled by ______ because ______. However, ______.”
Lesson 6: Who Should Pay for Progress?
Lesson 6: Who Should Pay for Progress?
The student can evaluate government intervention using the concepts of market failure, efficiency and equity.
The student can analyse the effects of taxes, subsidies and regulation on consumers, producers and society.
The student can explain how different stakeholders influence economic policy and how their interests conflict.
The student can justify an economic policy decision by weighing short-term costs against long-term social benefits.
Make Assignment 1
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Critical questions
If plastic pollution is a negative externality, why might the free market produce too much plastic packaging?
Does the business paying the tax necessarily bear the full economic burden?
If demand for takeaway food is not really influenced by price changes, what might happen to consumers?
Could the policy fail even if the tax is successfully collected?
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Market failure may justify government intervention, but intervention does not automatically guarantee an efficient or 'fair' outcome.
Negative externality
Market price excludes some social costs
Possible government intervention
Evaluate the outcome
The policy negotiation
Scenario
The government has decided to consider a new plastic packaging tax. Four stakeholders have been invited to negotiate the final policy.
Their task is not simply to agree that plastic waste is a problem. They must decide who should bear the costs of reducing it, how strong the intervention should be and how to prevent unintended consequences.
Prepare your strategy
Each student prepares their position independently.
You must identify:
Your main objective.
One economic concept that supports your position.
One likely unintended consequence of your preferred policy.
One concession you could make to reach an agreement.
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Two possible solutions
A. Plastic packaging tax (Lorin and Jent)
One advantage
One disadvantage
One condition under which this policy would be effective.
B. Regulation limiting plastic packaging (Yulia and Sude)
One advantage
One disadvantage
One condition under which this policy would be effective.
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