externalities

Question 1

What is a positive externality

Answer 1

producing or consuming a good cause a benefit on third parties not directly related to the transaction.

Question 2

What are negative externalities

Answer 2

producing or consuming a good cause a cost on third parties not directly related to the transaction.

Question 3

Evaluation for externalities

Answer 3

Most goods and services produce both positive and negative externalities
Key is to focus on the net social benefit or cost