Economic Impact on Third parties:  Often economic activity has an impact on those not involved in the interaction.  This type of economic wrath can be positive and/or negative.

• What is the relationship between private and social marginal costs?
• What is the relationship between private and social marginal benefits?
• Using the externality graphs illustrate how the government responds to market failures such as the existence of positive and negative externalities.
• Do cap and trade policies provide a workable solution to the nation's pollution problems?

• Market Failure
• Externalities- Side effects on third parties
• Marginal Social Costs (Negative Externalities)
• Marginal Social Benefits (Positive Externalities)
• Anti- Trust Policies
•  Free Riders