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This video lesson is from the 2018 AP Microeconomics Exam. This video is designed for students to practice the question to enhance their content knowledge on externalities, and as a resource for teachers to use in their classroom. There is no audio in this video lesson, just a continuous video of the questions and answers. The overall objective is for students to pause the video, answer the questions, and play the video to see if they get the questions correct. This is where teachers can explain why the answer is correct to their students if needed. I hope you find this video lesson helpful. Part (a) identify the type of market failure illustrated by the graph. Part (b) identify the market equilibrium price and quantity. Part (c) identify the area representing deadweight loss. Part (d) if a subsidy is implemented to correct the market failure, what is the dollar of the per-unit subsidy that would achieve the socially optimal quantity? Part (e) if a price floor is implemented, how many units will consumers and producers exchange at the floor and does the price floor correct the market failure?
