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प्रश्न
Discuss briefly the concept of 'Externalities', with suitable example.
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उत्तर
Externalities: It refers to the positive or negative impact of an activity without any cost or penalty.
- Positive Externality: Externality is defined as having a positive impact on a third party without incurring any costs. For E.g. Construction of a flyover reduces journey time, a beautiful park in front of your house, etc.
- Negative Externality: Without his/her own fault, he/she has a negative impact on a third party. For E.g. Contaminated water from factories, Smoke emission from chimneys of factories, etc.
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संबंधित प्रश्न
Define externalities. Give an example of negative externality. What is its impact on welfare?
Sale of petrol and diesel cars is rising particularly in big cities. Analyse its impact on gross domestic product and welfare.
If the Real GDP is Rs400 and Nominal GDP is Rs450, calculate the Price Index (base = 100).
Write down some of the limitations of using GDP as an index of welfare of a country.
"Many goods and services which may contribute to welfare, but are not included in estimating Gross Domestic Product (GDP)."
Do you agree with the given statement? Give valid reason in support of your answer.
State the meanings of the following:
Externalities
Which of the following is a reason why GDP is not a perfect index of welfare?
Welfare depends not only on the size of GDP but also on what other factor?
Why are domestic services performed by women at home excluded from GDP?
What is a barter exchange?
Why does GDP underestimate actual productive activity and welfare in underdeveloped and remote regions?
What is the effect of negative externalities on the measurement of welfare by GDP?
What are positive externalities?
