Market Failure Practice

Name the type of externality and draw the diagram to represent the following
externalities
a. Mental health issues in workers, due to poor working conditions in the Foxconn
factory making Apple products.

Negative production externality – will affect family etc. of workers

Apple Products

b. Breweries figuring out how to use pure alcohol to make hand sanitiser during
the COVID-19 crisis

Positive production externality – will positively impact the health of society and
reduce infection rates

Hand Sanitiser

c. Family installs solar panels on the roof of their home

Positive consumption externality – reduction in fossil fuels and environmental impact

Solar Panels
 d. Person consumes bottled water instead of tap water

Negative consumption externality – more plastic waste, poor environmental

outcomes

Bottled Water