The Cost of Our Futures: Oil Markets and Government Intervention
William Lawrence McKinney
Your feedback is important to us!
After viewing our curriculum units, please take a few minutes to help us understand how the units, which were created by public school teachers, may be useful to others.
Unit Objectives
This unit proposes several large topics for students to consider. Thus far, students have studied larger topics like market structure, supply and demand, elasticity, consumer theory, and profit maximization. Students have become experts at identifying whether a market is allocatively efficient or not, but have yet to discuss how economics is used to combat inefficiency within the markets. The essential questions for the unit are thus
-
1. How can the government regulate the markets to increase the efficiency of the markets?
-
2. How do government regulations (specifically taxes and subsidies) impact the output levels of firms?
The primary objectives of the unit are for students to be able to…
-
1. Differentiate between and identify examples of public goods, private goods, common resources, and goods created by natural monopolies;
-
2. Define and differentiate between positive and negative externalities;
-
3. Sketch graphs of various product markets that illustrate the existence of an externality;
-
4. Define and identify what is socially efficient on a graph verses what is efficient within the private market;
-
5. Differentiate between and explain the impacts of government-imposed taxes and subsidies (per-unit and lump-sum); and
-
6. Identify what type of government regulation could theoretically be imposed to produce a desired economic effect.
Unlike previous units in the class where students have been instructed to not take a position, but to study the economics from a theoretical standpoint instead of a political one, students will be asked to debate the role of the government in the petroleum and energy markets. Given the many externalities that exist, students will attempt to answer the question "What is the cost of our futures?" Students will debate what role the government should play in regulating the energy market.
