Additional Reading #2 - Assignment Example

ction of an important good thereby leading to a problem whereby no one pays for the good and thus no one gets it despite the product having a higher value compared to the expenses that would be incurred in its production. However, in real sense, the world is never rigid since there are many individuals who are not perfectly selfish thus making it possible to charge consumers for part of the benefit they enjoy. This is because not every individual act or behave in the same way thereby causing variations and differences.

Thus, the small percentage of individuals that does not conform to the group behavior brings the small benefit. However, the small benefit constitutes the externality causing underproduction and not the non-existence of a product (Harris, 34). It is of crucial significance to note that there are several forms of externalities. In relation to this, it is important to highlight that externalities may always have several effects. Some of the effects of the externalities may be beneficial (Harris, 68).

However, it is of critical to note that some externalities have negative effects on the parties involved. In connection to the above case, it is of critical significance to note that whatever the effects of externalities on the surrounding environments, there are several factors to which such effects are based. Externalities that result to positive influences in the lives of people, as well as, to their surrounding are closely associated with positive externalities (Harris, 73). However, it is prudent to acknowledge the fact that externalities that are associated with bad or negative impacts on the lives of human beings, as well as their surroundings are results of negative externalities.

Based on the above, it is of critical significance to know some of the examples of externalities. In addition, it is prudent to understand the nature as well as effects associated with each form of externality. In relation to this, it is prudent to note that one of the