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Microeconomics

13th Edition
Roger A. Arnold
ISBN: 9781337617406

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BuyFindarrow_forward

Microeconomics

13th Edition
Roger A. Arnold
ISBN: 9781337617406
Textbook Problem

Identify three activities that generate negative externalities and three activities that generate positive externalities. Explain why each activity you identified generates the type of externality you specified.

To determine

Identify three activities that generate positive externality and negative externality.

Explanation

An externality can be beneficial or cost, which means that it may be positive or negative externality. When a cost is imposed on the third party who is not directly involved in an economic transaction, it is called negative externality. On the other hand, the benefit conferred on the third parties who are not directly involved in an economic transaction is called positive externality...

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