Business, 30.11.2019 04:31 luckylady

Describe what is meant by externalities.

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Answer from: Xaviiier

Externality is when the a third party not involved in production or consumption activities is impacted by these economic activities.

Externality is a form of market failure.

Externality could be postive or negative.

Positive externality - externality is positive when the benefits of economic activities to a third party exceeds its cost. An example am activity that generates positive externality is research and development. For example, research in the medical field has led to the discovery of cures to deadly diseases. The benefit of the research to the society exceeds its cost. Government can promote activities with positive externality by giving subsidies.

Negative externality is when the benefits of economic activities to a third party is less than its cost. An example of negative externality is pollution. A cigarette smoker is harming those around him. The cost to the people around him is more than its benefits. Government discourage activities that generates negative externality by taxation which makes prices higher. This type of tax is known as pigovian tax.

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Answer from: Quest

Ithink b hope that

Answer from: Quest

1 all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

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