Every economic decision involves externalities. What does this mean? Give an example of a negative externality and an example of a positive externality?
2006-12-12 06:18:32 · 3 answers · asked by Ballknock 1 in Social Science ➔ Economics
Examples of Negative Externalities
-Air pollution.
-Water pollution.
-Loud parties next door.
-Traffic congestion.
-Second-hand cigarette smoke suffered by a non-smoker.
-Increased health insurance premia due to alcohol or tobacco consumption.
Examples of Positive Externalities
-A well-maintained property next door that raises the market value of your own property.
-A pleasant cologne or scent worn by the person seated next to you.
-Improved driving habits that reduce accident risks.
-A scientific advance.
2006-12-12 06:40:28 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Well, I won't do your homework for you, but I'll guess your sticking point is "externalities" which I would take as "things external" or "beyond your control".
So, if you're budgeting for heating oil for the year, or guessing how much you have to pay for college, or expecting to earn so much, each of these rely on external things - things beyond your direct control. Maybe you have a job, but the company president dies in a car crash, or they lose their largest customer, and lay people off. That's beyond your control.
So, from there, figure out what negative and postive externalities might be.
2006-12-12 06:32:32 · answer #2 · answered by T J 6 · 0⤊ 1⤋
Arrggh!! The first respondent is right: do your homework!
Even if you refuse to do your course readings (something we professors can never quite understand: you pay to take these courses, why not actually do the work?) there's a decent explanation of economic externalities available from a prominent website - why wouldn't you simply do a google search before posting here?
Are you *that* lazy!?
2006-12-12 06:43:51 · answer #3 · answered by Disembodied Heretic 2 · 0⤊ 2⤋