Unit 6: Chapter 28

Question 1

What are positive externalities?

Answer 1

actions of consumers or producers that give rise to a positive side effect on other people who are not part of these actions, therefore society within the country will benefit

Question 2

What are external benefits?

Answer 2

benefits enjoyed by the rest of the society, including the environment

positive side-effects of production and consumption to a third party

Question 3

What is negative externality?

Answer 3

actions of consumers and producers give rise to a negative side-effect on other people who are not a part of those actions, therefore the welfare of the population is reduced

Question 4

What are external costs?

Answer 4

costs paid by the rest of society, including the environment

the negative side effects of production to a third party

Question 5

What are some examples of external costs?

Answer 5

pollution, harm to wildlife, litter etc.

Question 6

What are pressure groups?

Answer 6

customers, organisations and local communities take action to stop and reduce external costs and be more ethical.

Question 7

What can the government do to reduce negative externalities?

Answer 7

give fines, set laws

or increase taxes on certain products, such as plastic bags to disincetivise people to use them.

Question 8

What is sustainable development?

Answer 8

development that does not put risk to the living standards of future generations

Question 9

What are the benefits of a business using sustainable development?

Answer 9

stronger brand image, ethical perception increasing, more demand for products, free promotion, more revenue and profit