Market transaction.
Externalities refers to a cost or benefit imposed on a third party that is not involved in a market transaction. I
would like you to give me two examples of a positive and negative externality in the environmental realm (4
total). What are the benefits and the costs associated with each type of externality in your example? How do
we incentivize good behavior derived from positive externalities? How do we deter individuals or entities from
acting a certain way when talking about negative externalities?
Sample Solution
Market transaction An externality is a cost or benefit of an economic activity experienced by an unrelated third party. Positive externality is a benefit from an economic activity experienced by an unrelated third party. Examples of positive externalities include: 1. Individual education. The increased levels of an individual`s education can also raise economic productivity and reduce unemployment levels. 2. Vaccination. Vaccination benefits not only the person vaccinated but other people in the community because the probability of being infected decreases. The majority of externalities are negative. A negative externality is a negative consequence of an economic activity experienced by an unrelated third party. Examples of negative externalities are: 1. Air pollution. A factory burns fossil fuels to produce goods. The people living in the nearby area and workers of the factory suffer from the deteriorating air quality. 2. Noise pollution. People living near a large airport suffer from high noise levels.
ervention based on their own interest, and receives the reinforce when the child attempts to follow the instructor’s prompt. Incidental teaching is also an intervention that promotes lasting and impactful results because it is an intervention that is early, it also can be done in a variety of settings with different people, it can have family involvement, the procedure can include peers, and it is fun for the child since it initiated by the child (McGee et al., 1999). Since it is child selected, it drives the child’s motivation, which ultimately assists the child to learn.