Question

Match each of the following characteristics or scenarios with either the term negative externality or the term positive externality.

     a. Overallocation of resources: (Click to select)Positive externalityNegative externality.

     b. Tammy installs a very nice front garden, raising the property values of all the other houses on her block: (Click to select)Negative externalityPositive externality.

     c. Market demand curves are too far to the left (too low): (Click to select)Positive externalityNegative externality.

     d. Underallocation of resources: (Click to select)Positive externalityNegative externality.

     e. Water pollution from a factory forces neighbors to buy water purifiers: (Click to select)Negative externalityPositive externality.

Answer 1

a) If resources are allocated over, then it causes to efficiency loss, over production, and supply side falls Hence, given statement is come under Negative Externalitj b) A garden would make the entire area look wonderful and bought positive impact. Thus, it might raise the property values. Hence, given statement is come under Positve Externality. c) If market demand curve too far to the left, it indicates positive effect on economy. Hence, given statement is come under Positive Externalitg d) If resources are allocated insufficient, then cost of production reduces, it leads to market took all benefits into account Hence, given statement is come under Positive Externality

e) It is very negative because pollution in general is disaster and very negative. Hence, given statement is come under Negative Externality