Asked by Takafumi Yoshida on Jun 24, 2024
Verified
Define positive externality, and explain how getting a vaccination is an example.
Positive Externality
A benefit that affects someone who did not choose to incur that benefit, often leading to an under-provision of a good or service.
Vaccination
A medical intervention that introduces a substance to stimulate the body's immune response against disease.
- Understand the importance of state involvement in amending market shortcomings resulting from externalities and knowledge asymmetry.
- Perceive the influence of externalities on economic activities and differentiate between social costs and social benefits.
Verified Answer
CM
Chloe MarieJun 25, 2024
Final Answer :
A positive externality is a benefit obtained without compensation by third parties from the production or consumption of sellers or buyers. Getting vaccinated against a disease benefits not only the person who gets the vaccination but everyone around him or her because they know the person will no longer be able to infect them.
Learning Objectives
- Understand the importance of state involvement in amending market shortcomings resulting from externalities and knowledge asymmetry.
- Perceive the influence of externalities on economic activities and differentiate between social costs and social benefits.
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