Slides 6–30

4. Progress through Slides 6–7. Distribute Externality Scenario Cards (1 card per pair). Students complete the instructions on the slide. Direct students to place their Externality Scenario Card under one of their seats — it will be used again in Steps 11–13.
5. Advance through Slides 8–9 and distribute 1 copy of Student Handout. Direct students to write examples, add notes, and/or draw pictures on Student Handout throughout the lesson.
6. Proceed to Slide 10. Define externality and present the dog example.
7. Advance to Slide 11. Explain how externalities create spillovers and ask students to identify the spillovers relevant to the dog example from Step 6.
8. Progress through Slides 12–14 to explain additional examples and define positive and negative externalities. Pause between each slide to allow students to write examples, add notes, and/or draw pictures on Student Handout.
9. Display Slide 15. Allow students a moment to discuss the question with a partner. Students indicate their answers with their fingers.
10. Proceed to Slide 16 to reveal the correct response. Explain why products and behaviors that result in externalities are underproduced or overproduced. (See the notes section of Instruction Slides for details on overproduction.)
11. Advance to Slide 17. Students discuss the question on the slide with a peer.
12. Proceed to Slide 18. Direct students to retrieve their Externality Scenario Card from beneath their seats. Using their assigned scenario, students discuss the questions on Slide 18 in pairs.
13. Call on 1 partnership with Scenario 1 to read their example aloud. As a class, students vote on whether Scenario 1 is a positive or negative externality. Select a student to explain their thinking and identify the spillover effect. Reference KEY Externality Scenario Cards as needed. Note: Highlight in each example the specific good or service likely to be overproduced or underproduced, and explain how the private cost or benefit differs from the social cost or benefit.
14. Repeat Step 13 for the remaining scenarios. Consider skipping the last 2–3 scenarios if students consistently demonstrate mastery. Collect Externality Scenario Cards.
15. Advance to Slide 19. Click to identify the questions that must be answered to begin remedying externalities.
16. Display Slide 20. Explain how externalities can be internalized and remedied. Direct students to add notes on Student Handout.
17. Proceed to Slide 21. Ask students to consider the questions on the slide as they watch the one-minute video clip. Play the video. Discuss the questions as a class.
18. Progress through Slides 22–24 and click to illustrate some of the ways externalities are remedied.
19. Display Slide 25. Explain the real-world success story of remedying the externality of ozone depletion. Pause to allow students to add notes or drawings to Student Handout.
20. Proceed to Slide 26. Introduce the hand-washing conundrum. Allow students to discuss with a partner how an economist would address the situation.
21. Display Slide 27. Allow students 30 seconds to review with a partner what the externality is and determine how it might be remedied. Discuss responses as a class.
22. Repeat Step 19 for Slides 28 and 29. Consider skipping the example on Slide 29 if students consistently demonstrate mastery.
23. Advance to Slide 30. Students discuss their responses with a partner before writing their response in the "Connection" section of Student Handout.