1.Positive externalities introduction

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5 Terms

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Positive externalities

benefits which affect third parties outside the price mechanism

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Positive consumption externalities

benefits that affect third parties as a result of a consumption of a good

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Positive consumption externalities examples

  • University students getting education can help people in society get healthcare(outside price mechanism)

  • Vaccinations as you benefit others because they won’t catch the illness from you.

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Positive production externalities

benefits that affect third parties as a result of the production of a good

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Positive production externalities examples

  • When a bee keepers produce bees for honey it helps pollenate nearby crops which help farmers

  • Transport helps people get to work faster which benefits the companies they work for