Negative Externality Examples

Externality: Externality can be defined as when producing or consuming a good / service causes an impact to third party indirectly. There are two types of externality

Positive Externality Negative externality.

EXAMPLE OF POSITIVE EXTERNALITY:

A farmer grows a mango trees the external benefit is environment would be pleasant so then people can live life pollution free and economic as have the advantage of mangos by selling’s it. It also leads to absorb carbon dioxide in the environment.

EXAMPLE OF NEGATIVE EXTERNALITY: Making furniture by using tress good it also harm the environment because of less tress in the environment

In economics, an externality is the cost or benefits that affect the other person. Many negative externalities are

The red line represents society’s supply curve/marginal cost curve while the black line represents the marginal cost curve that the firm or industry with the negative externality faces. The optimal production quantity is Q’, but the negative externality results in production of Q*. The deadweight welfare loss is shown in Gray.

EXAMPLE:

Burning vegetation or Air pollution from burning fossil fuels. This activity causes damage to crop, buildings and public health. During the dry season, haze always occurs. The problem has not only become a domestic affair but also affects internationally Singapore reputation in other countries. This is called negative externalities by economist.

Externalities are a major cause of market failure and occur in nearly every market- is clear on effect for producers and consumers. Negative externalities lead to a situation where the social benefits of consumptions are less than the private benefits.

EFFECTS ON

Haze from the fires can extend to Malaysia, Singapore and Thailand, shrouding them in smoke and affecting transport and economic activities for millions more people, resulting in billions more dollars of economic losses. Clearly, the economic losses associated with uncontrolled fires are contributing to and restraining development in the region." (4) The return of haze in Singapore has brought the predictable round of complaints, analysis, hand-wringing and soul-searching, but the problem never seems to improve.

To interpret the haze challenge is as an economic development and poverty issue. In burning vegetation, farmers pursue what they believe is the best available alternatives; Economist would describe the haze as a negative externality.

Unfortunately, the haze problem has been cast as a burden primarily on Singapore, but it also negatively affects Indonesia itself. Some farmers may understand the negative impact on broader Indonesia society but still refuse to change their behavior. Vegetation fires, mostly caused by humans, can be predicted and in many cases prevented through the applications of appropriate policies.

"After a recent visit to Burma, Ali Alatas, the Indonesian foreign minister, said that the best approach was constructive engagement by encouraging Rangoon to modify its policies through frequent contacts or imposing economic sanctions."