Negative Externalities Of Cars

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My portfolio is about the negative externalities caused by cars and falls under the category of market failure in micro economics. Negative externalities are externalities that have a negative effect on other people and do not have their costs paid for by the producer of this externality. If a certain good is causing externalities then that good will go into overprovision so for example the more cars that cause external costs the more overprovided they become. There are many negative externalities caused by cars, these externalities are: • Accidents: This covers medical cost for injuries as well as costs for death caused by cars. This causes a lot of problems because car crashes aren’t rare occurrences and when they happen a lot of money is needed to pay for the life insurance if the death of someone happens along with payment for any injuries and damages which is all paid for by the government with our taxes. • Noise pollution: May cause problems for people living near roads and can decrease the value of land if the noise pollution is too loud in that area. Noise pollution mainly cause social cost and annoys people. It causes social cost by decreasing the value of the land of someone who lives close to a road so that if they ever want to sell it they won’t be able to make as much profit as they could when it had its original cost it can also cause damage to ones ears if there a lot of cars who constantly beep their horns. • Air Pollution: These externalities as everyone knows can cause serious damage to the lungs of a human being if the fumes from the cars exhaust are sucked in too often along with damage to the atmosphere. This is also a very problematic issue since its damaging to our lungs and can cause lung cancer it can give people headaches, can make us light headed. In one extract it’s said

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