2.8 POSITIVE EXTERNALITIES

Question 1

whats a positive externality

Answer 1

beneficial effect experienced by third parties as a result of an economic activity,

Question 2

what does positive externalities do in consumption

Answer 2

create benefit spillovers for 3rd parties

Question 3

whats the result of the positive externality

Answer 3

the social benefit of production / consumption is greater than the private benefit

Question 4

external benefits might be in the form of :

Answer 4

1) lower costs for 3rd parties
2) increased revenues for 3rd parties
3) increased utility for other parties

Question 5

what are positive externalities associated with

Answer 5

merit goods and services

Question 6

what does positive externalities in consumption always involve

Answer 6

a value judgement