Homework Help: economics help

Posted by Deana on Thursday, August 24, 2006 at 6:38pm.

Could you please provide some suggestions to this question:

provide one example of a positive externality that may have affected the U.S. economy in the last 5 years. Elaborate on its impact and consequences.
Thanks

A positive externality occurs when someone benefits from another's activity or market transaction. For example, painting my house makes the neighborhood look a bit nicer, thus improving the value of my neighbors' houses. Or getting a flu shot reduces the chance my co-workers will get the flu. Research and development in one particular area often leads to improvements in other areas. For example, making faster computer chips has lead to an explosion of technically advanced computer games, etc. The internet is a good example of a "network" externality. As more poeple get internet access, more internet content becomes available.

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