Economics
ECO 204 Ashford University Wk 2 Externalities and Growth Discussion

ECO 204

ashford university

ECO

Question Description

I’m studying for my Economics class and need an explanation.

Externalities are costs or benefits associated with consumption or production that are not incurred by the consumer or producer and are therefore not reflected in market prices. The cost or benefit of an externality remains external when falling to parties other than the buyer or seller.

Respond to the following:

  • Describe some differences between a positive externality and a negative externality.
  • Provide one example of a positive externality and a negative externality, respectively. Explain your reasoning.
  • How could you solve your examples of externalities to attain market efficiency?
  • Does the government need to intervene with externalities to effect market efficiency?

Your initial post should be a minimum of 300 words.

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Final Answer

Attached.

Externalities - Outline
Thesis statement: Most externalities are considered technical externalities and thus, cause
market deficiencies. Therefore, making people advocate for government intervention to curb
adverse effects of these externalities.
I. Example of a positive externality
A. Education
II. Example of a negative externality
A. Pollution
III. How the government intervenes
A. Legislation
B. Taxation


Running head: EXTERNALITIES

1

Externalities
Name
Institution

EXTERNALITIES

2
Externalities

The cost or benefits that third parties incur or receive refer to externalities. These
externalities stem from production or consumption. These externalities can affect an individual
or an organization or may change the whole society. Most externalities are considered technical
externalities and thus, cause...

henryprofessor (72754)
Boston College

Anonymous
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