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Positive externality |
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Positive externalityA beneficial externality; that is, a beneficial effect of one economic agent's actions on another. Considered a distortion because the first agent has inadequate incentive to act. Examples are the attractiveness of well-kept farms for the tourism industry (a production externality) and reduced contagion of disease due to vaccines (a consumption externality).Similar MatchesHarmful externalityHarmful externalityNegative externality. ExternalityExternalityAn effect of one economic agent's actions on another, such that one agent's decisions make another better or worse off by changing their utility or cost. Beneficial effects are positive externalities; harmful ones are negative externalities. Production externalityProduction externalityAn externality arising from production. Negative externalityNegative externalityA harmful externality; that is, a harmful effect of one economic agent's actions on another. Considered a distortion because the first agent has inadequate incentive to curtail their action. Examples are pollution from factories (a production externality) and smoke from cigarettes (a consumption externality). Consumption externalityConsumption externalityAn externality arising from consumption. |
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