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Externality
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Externality
Externality in economics is known as the benefit or cost that a person gets from someone else's goods or services. The third party that enjoys the cost or benefit has no control over it and therefore can stem from either consumption of goods and services or production. For instance, the neighbor's barking dog is both positive and negative externality because that dog can scare your family members or friends that come to meet you at home. In addition, unwanted noise can annoy you that show the negative externality. However, the barking dog can save your home from the thief and other unwanted people that result in positive externality.
Pollution can make us better off; therefore, there is no need to eliminate all pollution. It protects the earth and human being in various ways. For instance, ozone that develops sue to the pollutants protects the stratosphere. It protects the earth from harmful ultraviolet radiation. If all pollution is eliminated then this ultraviolet radiation will affect human skin and will cause diseases like skin cancer. However, excess of pollutants can be harmful as it increases earth temperature. Therefore, pollution can be beneficial but its percentage should be minimized to the point where people can get better off.
When an individual thinks about types of goods then rivalry and excludability are the two concepts that help to classify goods and services. A thing that an individual can use and no other person can get benefit from it then this is a rivalry good. On the other hand, a good used by the individual can stop the other individual to consume it if he did not pay for it. Through rivalry and excludability concept, goods can be divided into four types including public goods, private goods, club goods, and common goods. For instance, freshwater, pasture are the public good as everyone has access to it while cars and houses are the public good who have paid for it. The examples of club goods are cinema, cable television, and wifi while public goods include rational defense knowledge, and fresh air ADDIN ZOTERO_ITEM CSL_CITATION {"citationID":"qNFRAUCA","properties":{"formattedCitation":"(\\uc0\\u8220{}Living Economics: Rivalry and Excludability in Goods,\\uc0\\u8221{} n.d.)","plainCitation":"(“Living Economics: Rivalry and Excludability in Goods,” n.d.)","noteIndex":0},"citationItems":[{"id":931,"uris":["http://zotero.org/users/local/rVaVAHaF/items/F3YMMHL2"],"uri":["http://zotero.org/users/local/rVaVAHaF/items/F3YMMHL2"],"itemData":{"id":931,"type":"webpage","title":"Living Economics: Rivalry and Excludability in Goods","URL":"http://livingeconomics.org/article.asp?docId=239","accessed":{"date-parts":[["2019",11,12]]}}}],"schema":"https://github.com/citation-style-language/schema/raw/master/csl-citation.json"} (“Living Economics: Rivalry and Excludability in Goods,” n.d.).
References
ADDIN ZOTERO_BIBL {"uncited":[],"omitted":[],"custom":[]} CSL_BIBLIOGRAPHY Living Economics: Rivalry and Excludability in Goods. (n.d.). Retrieved November 12, 2019, from http://livingeconomics.org/article.asp?docId=239
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