GENERAL KNOWLEDGE

Detailed explanation-1: -To help reduce the negative effects of certain externalities such as pollution, governments can impose a tax on the goods causing the externalities. The tax, called a Pigovian tax-named after economist Arthur C. Pigou-is considered to be equal to the value of the negative externality.

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: -Government can discourage negative externalities by taxing goods and services that generate spillover costs. Government can encourage positive externalities by subsidizing goods and services that generate spillover benefits.

Detailed explanation-4: -CONSUMPTION, production, and investment decisions of individuals, households, and firms often affect people not directly involved in the transactions. Sometimes these indirect effects are tiny. But when they are large they can become problematic-what economists call externalities.

Detailed explanation-5: -Air pollution production. Water pollution production. Farm production. Garden production. Traffic congestion consumption. Noise consumption. Secondhand smoke consumption. Strobe light consumption. 10-Mar-2023