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Plastic Shopping Bag Policies Are Actually Working

EconEye Admin

The extra fee at the grocery store for a plastic shopping bag is reducing the amount of bags being used.  Plastic pollution from shoppers not only diminishes the enjoyment of nature but also harms marine animals that ingest plastic bags, often resulting in starvation and death.—cnn.com

Answer the following questions to check your understanding of the story.

What type of externality does shopping with plastic bags create?

Wrong! - Are shoppers the producers of plastic bags? What type of externality do they create?

Good Job! - When shoppers use plastic bags, they create pollution and harm other people and animals. By using plastic bags, shoppers create a negative consumption externality.

Do shoppers overuse plastic bags?

Wrong! - Using plastic bags is convenient but couldn’t convenience lead to overuse? Does overuse of plastic bags occur because of shoppers following the actions of others? Can’t shoppers overuse plastic bags even if they use the amount available?

That's Right! - Shoppers ignore the external cost—the pollution experienced by others and the harm to animals—by using plastic bags. By not considering the total cost, they overuse plastic bags.

Why does the fee for plastic shopping bags reduce the number of bags used?

With the fee, ___________.

Wrong! - Does the fee target plastic bags or groceries? Why would a fee on plastic bags increase the benefits shoppers receive from using them? Does the external cost of using plastic shopping bags change when a fee is charged?

Correct! - Plastic bags and cloth bags are substitutes. With the fee on plastic bags, many shoppers use fewer plastic bags and substitute cloth bags.

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