Sunday, June 12, 2011

externalities

Externalities are pretty hard to comprehend because they affect people that are not involved in the decision making. Like say i go to the store and get the ice cream that i like for my family to eat. It does not matter if they like it or not because they are affected by the choice i made with publix without being involved in the decision. They can have negative and positive affects. An example is that if i decide to smoke a cigarette inside a classroom. The decision i made is going to harm people in 2 ways, second and third hand smoke. Everyone know about second hand smoke but third hand smoke is less commonly known. Third hand smoke is explained by me smoking that cigarette in a room and the toxins go into the carpet and the walls and for 6 months or so after that the carpet and walls release the toxins into the air in the room. So a person that did not even know i was there smoking 4 months earlier is going to be harmed by the smoke toxins. a postive example is like the ice cream one i used. When i go to the stores and get ice cream that i like and bring it back home and everyone else likes it also. With these example i think that is the best way to understand externalities in their simplest form.

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