Externalities (also called external effects) include the consumption of something by one agent that necessarily causes the consumption of either the same of a different good by another agent. Examples of externalities include the forced consumption by others within earshot of a person enjoying their own loud music. This idea really comes into effect in the case of pollution: that is, one agent pollutes in making something but many deal with the effects of that pollution.
While many externalities are negative, there are also many externalities that are positive, and tend to almost exclusively be charges of the government. Some common examples are the CDC (Center for Disease Control and Prevention), which coordinates control of infectious diseases to prevent widespread infection and sickness and has overseen the eradication of diseases like polio in the country under its watch.
Incoming search terms:
- externalities and engineering
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- positive externalities in engineering