Question

Explain what aspect of the tragedy of the commons problem is similar to that of a positive externality.

Answer 1

Positive externality occurs when the production of a good causes a benefit to a third party.Unlike the case of negative externalities, which should be discouraged to achieve a socially efficient allocation of scarce resources, positive externalities is the tragedy of the common problem to cope up with this positive externality should be encouraged by the government by implement economic policies that promote positive externalities. There are two general approaches to promoting positive externalities;

Is to increase the supply of, and demand for, goods, services and resources that generate external benefits.