a) Explain how the positive externalities normally created by activities such assnow shovelling lead to an inefficiency from a social point of view. WHY SHOULD OTHERPECPLE BENEFIT FROMMY HARD WORK?Figure 1Figure 1 shows how Calvin carefully avoids creating a positive externality (thinkof this as the equivalent of a factory applying a filter to eliminate any pollutingemissions). Assume that this way of snow shovelling does not create anyadditional costs for Calvin (no extra effort and he has no plans to return homeany time soon).

Externalities are the cost or benefit of an economic transaction incurred on a third party who is…

Answered: Explain how the positive externalities…

Explain how the positive externalities normally created by activities such as snow shovelling lead to an inefficiency from a social point of view

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

a) Explain how the positive externalities normally created by activities such as
snow shovelling lead to an inefficiency from a social point of view.

WHY SHOULD OTHER
PECPLE BENEFIT FROM
MY HARD WORK?
Figure 1
Figure 1 shows how Calvin carefully avoids creating a positive externality (think
of this as the equivalent of a factory applying a filter to eliminate any polluting
emissions). Assume that this way of snow shovelling does not create any
additional costs for Calvin (no extra effort and he has no plans to return home
any time soon).

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