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Externalities

Published on Nov 22, 2015

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PRESENTATION OUTLINE

1.

EXTERNALITIES

An unintended side effect that either benefits or harms a third party not involved in the activity that caused it.

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2.

Negative externalities harm, cost, or inconvenience a third party.

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3.

Positive externalities benefit someone who isn't involved in the activity.

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4.

These are seen as a failure because they aren't reflected in the market prices that buyers and sellers pay

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