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An externality is an effect of a decision on a third party not taken into account by the decision maker. One example that comes to mind is a new business opening in an area. The decision of where to place a new Wal-Mart is an important decision for the company. But in the course of making that decision, they will not consider every alternative. For example, some of the other businesses in the area may experience larger sales because Wal-Mart will bring more people to the area. An externality can be positive or negative. A negative externality is negative when the decision is detrimental to those outside the decision. A positive externality occurs when the effect of a decision is beneficial to others outside the decision.
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true
Can you use externality in a sentence?
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Internalize an Externality?
to compensate an externality if it is an external cost then taxes will be imposed if it is an external benefit then subsidies will be imposed.
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Is it true or false that noise pollution from a racetrack is an example of a positive externality?
False; noise pollution form a race track is not an example of positive externality. It is more likely an example of negative externality.
What is prediction market?
prediction market is a market where investors can buy and sell predictions about the outcome of an event.but what are these predictions
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Does not taking a pregnancy test in the morning affect the outcome?
No it doesn't effect the outcome of the result.
