Question

As a greater proportion of the population is vaccinated, diseases are less able to spread to those who do not get the vaccine. This is an example of a positive externality.

A.) True

B.) False

Answer 1

We know Externality refers to any external action by an individual or firm which will have an impact on the others. The impact can be either positive or negative and hence we call them positive externality or negative externality on that basis.

So, With more people getting vaccinated they will develop antibodies for fighting against the spreading disease and as a result will reduce the chances of them being infected.

With lower people infected they will decrease the transmission of spreading of disease and hence even people who are not vaccinated are also benefitted. So this will have a positive impact and hence a positive externality.

So, It is an example of positive externality.

A. TRUE