definition:An economic side effect of a good or service that
creates both benefits and costs.
positive externalities:Benefits created by production that are passed on to those not involved in the production in any way – such as entrepreneurs. negative externalities:Costs created by production that are passed on to those not involved in the production in any way – not as labor, resource owner, entrepreneur or consumer. connected key terms: free riders | market failures |
1▪ your property value goes up when your neighbor fixes up his yard and paints his house |