Question

If in a locality a new park is developed by the municipal corporation it will have externalities both positive and negative.state one example each of both types of externalities with reason

Answer 1

Answer:

positive externality: development of small businesses. negative externality: pollution

Explanation:

• the development of park in a particular locality will attract people towards the place which will eventually lead to the starting of small businesses like food stalls,doll shops etc., such type of businesses might improve the income of such ppl.But it ll increase public consumption and lead to the pollution of the surrounding.

Answer 2

Answer:

There are both negative and positive externalities in this situation. Firstly, as the parks are being developed there is a well being among the people of the society as these parks will be used by them by various physical workout. so this will increase well being among them. Positive externalities results in underestimation of GDP.

Secondly, there are many unsociable practices occurring in these parks like drugs etc. This is a negative externality as there is no well being Among the people. Instead there is loss in the welfare of the people. Negative externalities leads to Overestimation of GDP.