Question:medium

Differentiate between positive and negative externalities.

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Positive externalities create benefits for society, while negative externalities impose costs; governments use subsidies and taxes to address them.
Updated On: Jan 13, 2026
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Solution and Explanation

\[ \begin{array}{|l|l|} \hline \textbf{Positive Externalities} & \textbf{Negative Externalities} \\ \hline \text{Provide benefits to uninvolved third parties.} & \text{Inflict costs on uninvolved third parties.} \\ \hline \text{Result in under-consumption in free markets.} & \text{Result in over-production or over-consumption in free markets.} \\ \hline \text{Examples: Education, Vaccination.} & \text{Examples: Pollution, Traffic Congestion.} \\ \hline \end{array} \]

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