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What Is an Externality? What Are Two Examples of Externalities

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Essay

What is an externality? What are two examples of externalities? Why is public policy making often concerned with externalities? How might policy makers encourage activities with positive externalities and discourage activities with negative externalities?


Definitions:

Commercial Ties

The economic and business relationships between companies, industries, or countries.

Europeans

denotes the people originating from or residing in Europe, often used in contexts discussing cultural, social, or political topics.

Captives

Individuals who are taken and held as prisoners, often in the contexts of war, slavery, or criminal activity.

Comanche

A Native American nation historically known for their skill as horsemen and warriors, whose homeland is located in the present-day southern Great Plains of the United States.

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