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"Education is the most powerful weapon which you can use to change the world”
– Nelson Mandela

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4-2 Simulation Checkpoint Assignment

4-2 Simulation Checkpoint Assignment

Q Overview This simulation checkpoint assignment directly supports your success on the course project. You will play the simulation games, create the image file of your simulation report, and discuss learned concepts and experiences in your submission. Directions For this assignment, first play the simulation games Externalities Without Policy Interventions and Externalities With Policy Interventions in the MindTap environment. Then you will report your experiences playing those games. Your work in this assignment will directly support your success on the course project. In your submission, remember to include the images of your simulation reports. See the How to Submit a Simulation Report Image document for more information. Then, reflect on the decisions you made in the simulation and address the following government intervention options in your submission: • Government Tools: Discuss tools available to the government to correct a market failure. Provide examples from the textbook. • Supply and Demand Equilibrium: Describe how government intervention affects the supply and demand equilibrium. Refer to the simulation game to explain your responses. • Consumer or Producer Surplus: Specify which government interventions cause a consumer or producer surplus. Explain how they impact consumer or produce surplus. Provide examples from the textbook. Guidelines for Submission Submit your assignment as a Word document. Use Section 2 of the Final Project Template.

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The simulations of this week were not clear to me. I could not understand the simulation. So, the simulation was quite tough for me. Externalities refer to the effect which one leads to bear without engaging in the activities. The two types of externalities are positive externality and negative externality. A positive externality occurs when the third person enjoys a benefit due to the transaction of another party. For example, education has a positive externality as education can increase the social welfare of the country (Mankiw, 2021). A negative externality occurs when a third person is harmed by an activity without engaging in this. For example, passive smokers are affected by active smokers. The externalities are the cause of market failure (Mankiw, 2021). Market failure occurs due to the inefficient distribution of goods and services in the economy. Government intervention can control the externalities in the economy. The tools used by the government for rectifying the market failure are discussed below (Mankiw, 2021):