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Externalities are costs or benefits associated with consumption or production that are not incurred by the consumer or producer and are therefore not reflected in
Externalities are costs or benefits associated with consumption or production that are not incurred by the consumer or producer and are therefore not reflected in market prices. An externality's cost or benefit remains external when falling to parties other than the buyer or seller.
What is one example of a positive externality and a negative externality, respectively? Explain your reasoning.
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