Saturday, December 6, 2014


There are no end of examples of externalities.  For example when one builds a home, there are costs incurred on society such as schools, police, roads, etc. that are not completely (actually only minimally) by the developers.  But on the flip side having a snow blower in the winter has positive externalities (assuming the owner loans it to the neighbors).  Above is the best video I can find find explaining externalities.

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