ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In the case of pollution-the traditional example of a negative externality-a polluter makes decisions based only on the direct cost of and profit opportunity from production and does not consider the indirect costs to those harmed by the pollution.

Detailed explanation-2: -A negative externality exists when the production or consumption of a product results in a cost to a third party. Air and noise pollution are commonly cited examples of negative externalities.

Detailed explanation-3: -Pollution is an example of a negative externality. Externalities that provide a benefit to others are “positive externalities.” Education, for example, generates positive externalities. Not all goods and services come with externalities, but many do-and some that do might be a surprise.

Detailed explanation-4: -The main externalities of air pollution include: Economic Costs. They include a wide range of externalities like damage to property, superstructures and infrastructure, and loss of productivity of people and crops.