Log out Go to App
Go to App

Learning Materials

Features

Discover

Chapter 12: Problem 15

Give an example of a positive externality and an example of a negative externality.

Short Answer

Expert verified
A positive externality example is vaccination, which not only protects the vaccinated person but also reduces disease spread, benefiting the community. A negative externality example is pollution from a factory that harms the ecosystem and affects people living nearby, imposing costs on them.

Step by step solution

01

Positive Externality Example

A common example of a positive externality is vaccination. When a person gets vaccinated, they not only protect themselves from illness but also protect the community by reducing the spread of disease. The individuals in the community who don't get sick due to other people's vaccination benefits from this positive externality.
02

Negative Externality Example

A common example of a negative externality is pollution from a factory. If a factory pollutes a river nearby, it may cause harm to the local ecosystem and the people living downstream who depend on the river for drinking water and other resources. In this case, the factory's action imposes costs on others, leading to a negative externality.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Start your free trial

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Identify the following situations as an example of a negative or a positive externality: a. You are a birder (bird watcher), and your neighbor has put up several birdhouses in the yard as well as planting trees and flowers that attract birds. b. Your neighbor paints his house a hideous color. c. Investments in private education raise your country's standard of living. d. Trash dumped upstream flows downstream right past your home. e. Your roommate is a smoker, but you are a nonsmoker.

Is zero pollution possible under a marketable permits system? Why or why not?

Can extreme levels of pollution hurt the economic development of a high-income country? Why or why not?

What is an externality?

Table 12.5 provides the supply and demand conditions for a manufacturing firm. The third column represents a supply curve without accounting for the social cost of pollution. The fourth column represents the supply curve when the firm is required to account for the social cost of pollution. Identify the equilibrium before the social cost of production is included and after the social cost of production is included. $$\begin{array}{l|l|ll}\hline \text { Price } & \begin{array}{l}\text { Quantity } \\\\\text { Demanded }\end{array} & \begin{array}{l}\text { Quantity Supplied without paying } \\\\\text { the cost of the pollution }\end{array} & \begin{array}{c}\text { Quantity Supplied after paying } \\\\\text { the cost of the pollution }\end{array} \\\\\hline \$ 10 & 450 & 400 & 250 \\\\\hline \$ 15 & 440 & 440 & 290 \\\\\hline \$ 20 & 430 & 480 & 330 \\\\\hline \$ 25 & 420 &520 & 370 \\\\\hline \$ 30 & 410 & 560 & 410 \\\\\hline\end{array}$$
See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free