Question

Consider the following examples of externalities and sort them into the appropriate category. The examples are: 1. herd immunity produced when a significant proportion of the population receives vaccinations 2. the development of antibiotic-resistant bacteria from overuse of antibiotics 3. anthropogenic climate change as a result of the raising of livestock (among other causes) 4. an employer providing first-aid classes to its employees to increase workplace safety 5. the construction of a new highway that speeds up travel in a big city 6. an increase in college attendance by high school graduates 7. traffic congestion during rush hour 8. the destruction of wildlife habitat due to the logging of a forest 9. the increased disease risk to nonsmokers from second-hand smoke 10. an individual who buys a run-down house and remodels it both inside and out These examples of externalities can be classified as either positive or negative and involving consumption or production, so there are positive production externalities, negative production externalities, positive consumption externalities, and negative consumption externalities. Sort the examples into the appropriate groups below.

Answer 1

Positive Production Externalities

1) Herd immunity prodcued when a significant proportion of the population receives vaccinations.

4) An employer providing first aid classes to its employees to increase workplace safety.

5) the construction of a new highway that speeds up travel in a big city.

Negative Production Externalities

3) Anthropogenic climate change as a result of the raising of live stockes(among other causes).

7) Traffic congestion during rush hour.

8) The distruction of wild life habitat due to logging of a forest

Positive Consumption Externalities

6) An increase in college attendance by high school graduates.

10) An individual who buys a run down house and remodels it both inside an out.

Negative Consumption Externalities

2) The developement of antibiotic- resistant bacteria from over use of antibiotics.

9) The increase disease risk to non smokers from second hand smoke