24. An example of an externality is the
impact of
Bad crops on the income of
farmers
A tax rate hike on person's
ability to purchase goods
and services
Pollution from a factory on
the health o people in the
area
Increase in the number of
Answers
Explanation:
What Is an Externality?
An externality is a cost or benefit caused by a producer that is not financially incurred or received by that producer. An externality can be both positive or negative and can stem from either the production or consumption of a good or service. The costs and benefits can be both private—to an individual or an organization—or social, meaning it can affect society as a whole.
Externalities by nature are generally environmental, such as natural resources or public health. For example, a negative externality is a business that causes pollution that diminishes the property values or health of people in the surrounding area. A positive externality includes actions that reduce transmission of disease or avoids the use of lawn treatments that runoff to rivers and thus contribute to excess plant growth in lakes. Externalities are different from donations of parkland or open-source software.
Understanding Externalities
Externalities occur in an economy when the production or consumption of a specific good or service impacts a third party that is not directly related to the production or consumption of that good or service.
Almost all externalities are considered to be technical externalities. Technical externalities have an impact on the consumption and production opportunities of unrelated third parties, but the price of consumption does not include the externalities. This exclusion creates a gap between the gain or loss of private individuals and the aggr