a) Technical Externality:
- It impact on the actual production or consumption possibilities of other consumers.
I) Positive technical externality:
- The bees from the apiary pollinate the fruits, which enable them to blossom. On the other hand, the nectar from the fruit increases the honey production of the apiarist.
II) Negative technical externality:
- The discharge of waste by factories along the passing river which kill all the fish in the river and make it possible for local fisherman to continue to harvest fish from the river.
b) Pecuniary Externality:
- A pecuniary externality does not affect the consumption or production possibilities of other producers or consumers, just their costs of production or consumption.
- A negative pecuniary may occur as a result of the project pushing up the price of specialized input that is inelastic supply, such as skilled labor. This externality will impact on other users of the factor who are forced to pay for it as a result of the project’s increased demand.
c) Externalities created during the production process:
- The water and air pollution created by an industrial project are examples of negative externalities created during the production process and are associated with the use and disposal of project’s inputs.
- The example of the apiarist and the fruit grower is one of the positive technological externalities being created during the production process.
d) Externality created in the distribution of projects outputs:
- Trucks carrying gravel and sand when distributed to the construction sites may break up local roads, causes noise, air pollution and road congestion and increase the number of road accidents.
- Streets entertainers, who while distributing their services, entertain passers who may not reward the entertainer, may create the positive externality.
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