Positiveand Negative Externalities Week 2 Discussion 1The Government monitors and regulatesbusinesses in both the public and private sectors, to ensure they are complyingwith Federal, State and local rules and regulations. The result of these regulationscan be referred to as positive or negative externalities. Provide an example of positive and negative externalities in the police(public) sector. What kind of impact can these externalities have on a budgetand the people responsible for creating the budget? Our text Mikesell, J. (2011). Fiscal administration,analysis and applications for the public sector (8th ed.). Boston, MA:Wadsworth/Cengage.Harris, P.(2009). What’s a crime prevention officer worth? Sheriff,61(6), 18-19. Document ID: 1871741921.An externality is referred to as a benefit or acost that emerges from an activity and it has an effect on a third party whodid not choose to incur the cost or benefit for example the society. In generalterms they are the costs and benefits that are linked with the production orconsumption of a good or service. Externalities can either be positive ornegative based on the nature of the effect on the third party. Externalitiesthat are negative cause too much of a product to be produced while positive externalitiestoo little products to be produced. Public goods are those that are hard to preventpeople from benefiting from such as clean water, national defense, clean air,law enforcement and many others. These are examples of positive externalities.In many circumstances negative externalities occur (Lavenex & Uçarer, 2003).Examples of Externalities are as followsPositive externalityImmunizations, such as a flushot, etc., offer a positive externality to third parties in that it aids in preventingthe spread of illness to the general public. A company offers funds for itsemployees to acquire expert training. By doing so, the company can be benefitedby improved production which also assists the customer. Moreover, this canbenefit the society as large by advancing the level of education as well as thequality of life. Improving driving habits will decrease the risk of accidentfor everyone on the road as well as eventually reduce insurance premiums of thedriver. “The fearof crime is always there. But, a community’s degree of involvement with lawenforcement activities can make all the difference. The role of citizens is essential in preventing crime is “important since theymay alert authorities, provide evidence, and denounce offenders” (Ferrer, 2008,p.2). Negative externality:A major example of negative externalities is pollution. Theproducer and consumer normally finance the goods produced while the societyincurs the cost of pollution that is introduced into the environment as aproduct is being manufactured and this is what makes it a negativeexternality. Raising the amount of coalburned to cause electricity hence raises the level of pollutants released intothe atmosphere that can lead to things such as global warming, acid rain andsmog. These externalities have an impact on the budget as well as the peoplecreating the budget since the costs and have to be internalized. The market hasto spend additional funds in order to compensate for damages that will beincurred hence there will be an impact on the budget (Papandreou, 1998). Negative effect occurs when the rate of community involvement islower than the crime rate”Negative externality Sleepdeprivation in police officers. This can have a huge effect on the dissions apolice officer makes. ReferencesLavenex, S., & Uçarer, E. M. (2003). Migrationand the externalities of European integration. Lanham, Md. [u.a.: LexingtonBooks.Ferrer, R. (2008, October). [PDF] Breaking thelaw when others do: A model of law … Retrieved fromwww.econ.upf.edu/…/Rosa%20Ferrer%20BTLWOD%20Revised%20version. pdf – SimilarPapandreou,A. A. (1998). Externality and institutions. Oxford: Clarendon Press.Not sure if I am on the right trackwith this and can’t think of a Negative Externalities regardingpolice. make any changes you feel necesary thanks
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