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Negative externalities arise when a person engages in an activity that has impacts on other people. These effects can be both positive and negative, but they are always unintended consequences of the initial action. When someone is engaging in a behavior that creates negative externalities for others, economists call this “market failure.” For instance, if I am pumping out toxic chemicals into the air and creating health risks for everyone around me while I work, then my actions create a negative externality for those who breathe the air near me.

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A negative externality arises when a person engages in an activity that has impacts on other people. These effects can be both positive and negative, but they are always unintended consequences of the initial action. When someone is engaging in a behavior that creates negative externalities for others, economists call this “market failure.” For instance, if I am pumping out toxic chemicals into the air and creating health risks for everyone around me while I work, then my actions create a negative externality for those who breathe the air near me. I question what it means to do good or bad by producing goods or services with zero-external costs or benefits? The reason why we think some things are worth doing even though there may be no private

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