EBK ESSENTIALS OF ECONOMICS
EBK ESSENTIALS OF ECONOMICS
7th Edition
ISBN: 8220102452107
Author: Mankiw
Publisher: CENGAGE L
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Chapter 10, Problem 1QR
To determine

Examples of externality.

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Explanation of Solution

The classic example of an externality is pollution. The production of goods emits pollutants in the environment, which lead to different kinds of pollution like air pollution water pollution, and so forth. These pollutions cause health problems for people who live near the production area. The examples of positive externality are restoration of historical buildings, facts that lead to the formation of new research and education, and so forth.

Economics Concept Introduction

Concept introduction:

Externality: Externality refers to the spillover of benefits or costs to a third party other than the immediate market participants.

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