Question

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Identify whether each of the following is a positive or negative externality. Explain your answer. 1. Restoring the Amazon forest can reduce global levels of pollution. 2. Building a nuclear power plant near a housing development. 3. Expanding commuter train service into the suburbs. 4. US exports outdated computers to Nepal for disposal. 5. A city expands the number of public parks it provides to increase the number of trees it has.

Answer 1

1. Restoring the Amazon forest - positive externality , as this will have a good impact on the society and the environment and will reduce pollution.

2. Building a nuclear power plant- negative externality, as this will degrade the environment and harm the society as well in future because pollution level would surely rise.

3. Expanding commuter train service- positive externality,as this will improve the conditions in the suburbs.

4. US's outdated exports to Nepal - positive externality for US

5. City expands parks- positive externality,as this action will improve the environmental conditions around and will benefit the society.