Determine the type of externality present in each of the scenarios below. negati

Question

Determine the type of externality present in each of the scenarios below. negative production positive consumption negative consumption positive production not an externality Franklin inhenits his parents home, but allows the house to sit unused and decaying Samantha finally finishes her certification as an electrician and no longer requires public assistance to provide for her child In order to repair the plumbing, Paul the Plumber had to block off half the street so he could replace old pipes Josephine is convinced that playing bagpipe music in the shop will keep her employees upbeat and productive. Most now wear earplugs A flexible, heat resistant material developed by NASA is now widely used in protective suits for firefighters

Explanation / Answer

Ans

Not an externality as 3rd party is not affected

Positive consumption as now the same amount can be used for other welfare activity

Negative production as it reduces supply to others

Negative productive as others are hurt by it

Positive consumption as third party benefits from its consumption

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