1 - Market Failure - Pos Externalities Flashcards
(5 cards)
1
Q
What’s a positive externality?
A
3rd party/spillover external benefit
2
Q
Examples of pos externalities
A
- fish industry benefitting from reservoir
- healthcare
- education
- dental care
- green spaces/parks
3
Q
When will there be a pos externality?
A
MSC<MPC
4
Q
Eval of gov policies to reduce/eliminate externalities
A
The success of it depends on:
- size of externality
- extent to which externality can be measured
- if there are unintended consequences
- whether there’s gov failure (info failure)
- opp cost
- how policy affects distribution of income
5
Q
Policies to address pos externalities
A
- gov provision free at point of use
- enforcement
- subsidy
- info campaigns
