S E16: Externalities - The Full Cost of the Choices we make
Think Like An Economist
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The Importance of Externalities in the Environment
Exter lities show us the limitations of relying on markets too much. Positive externalities are activities where other people benefit from you taking some action. We also have negative externalities, which are activities which impose costs on others. The biggest example is pollution, because our use of carbon is contributing to climate change and that big cost is being ignored by most people.
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