BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Regulation is considered the most common solution. The public often turns to governments to pass and enact legislation and regulation to curb the negative effects of externalities.

Detailed explanation-2: -In economics, there are four different types of externalities: positive consumption and positive production, and negative consumption and negative production externalities. As implied by their names, positive externalities generally have a positive effect, while negative ones have the opposite impact.

Detailed explanation-3: -A negative externality exists when a cost spills over to a third party. A positive externality exists when a benefit spills over to a third-party. Government can discourage negative externalities by taxing goods and services that generate spillover costs.

Detailed explanation-4: -The government can reduce the effects of externalities by passing new laws that directly regulate problematic behavior. This is a command-and-control approach that works well for simple and/or extreme cases of externalities.

Detailed explanation-5: -Environmental externalities are identified as part of the envi-ronmental assessment. They are quantified where possible and are included in the eco-nomic analysis as project costs (e.g., increased illness, or reduced productivity of nearby farm-lands) or benefits (such as reduction in pollu-tion of coastal areas).