Externalities in Economics

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This video discusses what externalities are in economics. An externality exists when you do something that affects the well-being or good of another person without compensating or being compensated by him or her for what you did. An externality can be negative or positive. Negative externalities occur when one party imposes costs on another party without compensating the party for the harm that is being done. Pollution is a negative externality- if a firm pollutes the air and someone who lives in a nearby home becomes sick from the pollution, there is a negative externality. With positive externalities one party is conferring benefits on another party without being rewarded for the good he or she has done. If you get a flu shot, you not only help yourself but you also help your co-workers and friends by reducing the chance that you will get sick and give them the flu. If these people don't compensate you for what you did, then it is a positive externality. • Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com • To like us on Facebook, visit / edspira • Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com • To follow Michael on Facebook, visit • / prof.michael.mclaughlin • To follow Michael on Twitter, visit • / prof_mclaughlin • This video was funded by a Civic Engagement Fund grant from the Gephardt Institute for Civic and Community Engagement at Washington University in St. Louis. • — • Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education accessible to all people. • — • SUBSCRIBE FOR A FREE 53-PAGE GUIDE TO THE FINANCIAL STATEMENTS, PLUS: • • A 23-PAGE GUIDE TO MANAGERIAL ACCOUNTING • • A 44-PAGE GUIDE TO U.S. TAXATION • • A 75-PAGE GUIDE TO FINANCIAL STATEMENT ANALYSIS • • MANY MORE FREE PDF GUIDES • http://eepurl.com/dIaa5z • — • GET CERTIFIED IN FINANCIAL STATEMENT ANALYSIS, IFRS 16, AND ASSET-LIABILITY MANAGEMENT • https://edspira.thinkific.com • — • LISTEN TO THE SCHEME PODCAST • Apple Podcasts: https://podcasts.apple.com/us/podcast... • Spotify: https://open.spotify.com/show/4WaNTqV... • Website: https://www.edspira.com/podcast-2/ • — • GET TAX TIPS ON TIKTOK • / prof_mclaughlin • — • ACCESS INDEX OF VIDEOS • https://www.edspira.com/index • — • CONNECT WITH EDSPIRA • Facebook: / edspira • Instagram: / edspiradotcom • LinkedIn: / edspira • — • CONNECT WITH MICHAEL • Twitter: / prof_mclaughlin • LinkedIn: / prof-michael-mclaughlin • — • ABOUT EDSPIRA AND ITS CREATOR • https://www.edspira.com/about/

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