Sometimes market activities have unintended positive or negative effects outside the market scope. These are called externalities. As a rule maker concerned with correcting effects of gases and particulates emitted through and local power plant, answer the following questions:

1. What two policies could you use to reduce the total amount of emissions?
2. Why do you think they each would work?
3. What would the benefits of each action be (besides emissions reduction)?
4. What would the costs of each action be?
5. How would you decide what was the best level of emission reduction?