What Is Meant by a Negative Externality? Use an Example

question 87

Essay

What is meant by a negative externality? Use an example in your explanation.

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Definitions:

Shareholder Model

A theory of corporate governance focusing on maximizing the value for shareholders, often at the expense of other stakeholders.

Ordovician Extinction

A major extinction event that happened about 445 million years ago, marked by significant loss in marine biodiversity, possibly due to climate change and falling sea levels.

Devonian Extinction

A series of global events leading to significant reductions in biodiversity at the close of the Devonian period around 359 million years ago.

Permian Extinction

A prehistoric global event occurring about 252 million years ago, marking the boundary between the Permian and Triassic geological periods, characterized by the most significant extinction event in Earth's history where nearly 90% of marine species and 70% of terrestrial species died out.