Externalities play a big role in how people make choices about what to buy. They can change how we see the benefits or costs of different goods and services.
Positive Externalities: Let’s think about a nice local park. If it's tidy and well-cared for, people might want to buy homes near it. This happens because having a lovely park nearby can make the houses worth more money.
Negative Externalities: On the flip side, imagine a factory that lets out harmful smoke. This could cause health problems for people living close by. Because of this, some families might choose not to buy homes in that area.
In simple terms, externalities can change what people like to buy. We often look at the hidden costs or benefits of our choices before deciding.
Externalities play a big role in how people make choices about what to buy. They can change how we see the benefits or costs of different goods and services.
Positive Externalities: Let’s think about a nice local park. If it's tidy and well-cared for, people might want to buy homes near it. This happens because having a lovely park nearby can make the houses worth more money.
Negative Externalities: On the flip side, imagine a factory that lets out harmful smoke. This could cause health problems for people living close by. Because of this, some families might choose not to buy homes in that area.
In simple terms, externalities can change what people like to buy. We often look at the hidden costs or benefits of our choices before deciding.