Question

In about two paragraphs, describe something that is a positive externality in your life. Explain why it satisfies that criteria.

Identify something in our society that is a common resource. Explain why it satisfies that criteria.

Infuse economics into your response.

Answer 1

Externalities in our life/society/economy plays a very crucial role in achieving our goals.In terms of economics,it is a determining factor in the way of achieving pareto-optimality or economic efficiency of our resources a other economic factors.'Externality' refers to the detrimental and beneficial effects of an economic unit(a firm,a consumer or an industry) on others.Positive externalities are the beneficial externalities created by a firm for others.In other words,when an economic unit creates benefits for other members of the society for which he does not receive any payment,there a exists a beneficial or positive economics.In this case,the private marginal cost of the firm will be higher than the social cost.

We can have a number of positive externalities around us.Talking about the most common that can be seen around us.'Corporate Social Responsibility' is an integral part of large MNCs or big producing firms,business houses etc.Also there is a rising concern around the world for saving our mother earth.Suppose as a part of this responsibility an MNC plants a large number of plants and trees in the geographical areas of its operations or somewhere else in the society,it develops green belts,parks with a wide variety of flowers etc.Due this people living in this area or nearby can enjoy good quality of life by getting great health benefits from it without paying for it.Diseases or health problems can be avoided that can save considerable amount of their budget expenditure.Ground water level can be maintained,this will benefit all.Again suppose anyone plans to practice apiculture by rearing honeybees then honeybees can collect nectar easily that can be consumed by all.

In terms of economics,anything that has some utility is classified as a 'Resource'.In simple terms,that can be put to some uses or it has some want satisfying capacity that can play a role in satisfying the needs and wants of an individual.Resources are of varied types that are classified on different basis.'Common resources' are such resources that are commonly available and are accessible to all i.e. each and every organism or different sections/individuals of the society.If we talk about natural resources such as air,water,forests etc.This can be a good example of common resource as this can satisfy the major of its criteria.Natural resources are commonly available to us that has been created by nature.Each and every organism be it a human being,bird,animal etc. has got equal access or right over these resources.Its a different thing that we the human beings have encroached everything and devoid others of their rights.These resources have great utility and can several uses or they are the most crucial,life is impossible without these resources.If we take the example of water or air,these are equally needed by every organism or every human being.It has great innumerable uses from dawn to dusk,that can satisfy the needs and wants of almost every individual.