{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Topic16_externality

Topic16_externality - Topic 16 Externality COMM 295 Ratna K...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Topic 16: Externality COMM 295 R K Sh h Ratna K. Shrestha
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Introduction Externality arises when a person or firm engages in an activity (production or consumption) that influences the well-being of a bystander and yet neither pays nor receives any compensation for that effect. For example pollution is an externality because For example, pollution is an externality because the polluter does not pay for the damages it causes to the environment. 2
Background image of page 2
Types of Externality Externality can be Negative or Positive depending h th th ti f t i upon whether the action of one party imposes a cost or benefit on another party. Negative Externalities : Examples Noise, vehicle exhaust, acid rain, ozone depletion caused by chlorofluorocarbons (CFCs), l b l i d h ( b global warming due to greenhouse gases (carbon particles from fossil fuel combustion, etc.). P iti E t lit E l Positive Externality : Examples research and innovation, neighbor’s nice backyard, Immunization. 3
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
ACID RAIN 4
Background image of page 4