Sarah M
Mr Sal
Period 4
What are negative and postive externalties, and why does goverment intervine and regulate them .
negative externalties-by products of production or consumptiton thatt impose cost on third parties.
positive-Those who are neither buyers nor seller in the transaction.(9tthird party)
They intervene on products that are harmful (like aerosol can and out-law them)and regulate the cost of stuff.
Hello, I am Josh B from Mr. Sal’s period 3 ECON class and today’s topic is externalities. There are many different externalities in buisiness and industry, but they can all be split into two groups; negative externalities and positive externalities. Negative externalities can be many things, but generally they are things that harm people or the environment. Government steps in to regulate these negative externalities because if not the factories will ignore the pollution they are causing and the open resources like water and sun power are deteriorated. They also regulate for future items, like saying that the cars cannot emit a certain amount of carbon. Positive externalities are things that are caused by products or industries that help the people or environment. The government in this case try to increase the production of the positive externalities to help the people and environment that were previously harmed by negative externalities.
What is an externality? An externality is a benefit given to the people with or without a cost. Why does the goverment regulate certain externalities? The government does this to help prevent health issues, global issues, and decrease the chance of spending money to fix these issues. An example of how this holds true with positive externalities is the example of the flu shot. The flu shot is usually covered by all insurances and is usually free to the patient but if people ignore this benefit they are more likely to get and spread the flu causing health probllems throughout the area. An example of why the government regulates negative externalities is because if a negative externality suffers damage its more costly to the government. An example is the nuclear power plant in Shippingport, PA. If something were to ever happen to the power plant it would cause the government massive ammounts of money on controlling the radiation, curing the people exposed, fixing the plant and its sources, and lastly sorting out the person(s) responsible. So for these reasons the government regulates certain externalities to prevent health issues, global issues, and decrease the chance of spending money to fix these issues.
An Externality is a benfit incurred by a group that diddn’t agree to the action that made that benefit. Externalities can be bad to gerneral economy, because they allow production of a product that may not have been entirly wanted. An example could be burning coal for fuel. While the burnt coal will allow a machine to run, the externatlity, smoke, could cause medical problems to a work force mantaining the machine. While not all externalities are as unsatisfying, it is important to reconize any changes that could cause them in the market.