Identify Two Activities That Generate Positive Externalities and Two Activities

question 169

Essay

Identify two activities that generate positive externalities and two activities that generate negative externalities. Be sure to explain why each activity you identified generates the type of externality you stated.

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Definitions:

Decreasing Opportunity Costs

A situation in which the opportunity costs of resources decrease as more of a good is produced.

Increasing Opportunity Costs

A situation where increasing production of one good requires larger and larger sacrifices in the production of another good due to limited resources.

Unemployment Rate

The ratio of the complete labor pool that is jobless yet is in active pursuit of employment and prepared to work.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen over others.