Question

1. positive externality

a. example:

1. negative externality

a. example:

1. transfer payment
2. subsidy
3. circular flow model

Explanation:

1. Positive externality occurs when the consumption or production of a good or service benefits a third - party not directly involved. Example: A beekeeper's bees pollinate a neighboring farmer's crops, benefiting the farmer without any cost.
2. Negative externality is when the consumption or production of a good or service imposes a cost on a third - party. Example: A factory's pollution harms the health of nearby residents.
3. Transfer payment is a payment made by the government to individuals or other entities without the receipt of a good or service in return, like welfare payments.
4. Subsidy is a financial aid or support given by the government to an industry or a firm to encourage production or consumption, such as farm subsidies.
5. Circular flow model is a simple economic model that shows the flow of money and goods and services between households and firms in a market economy.

Answer:

1. a. A beekeeper's bees pollinating a neighbor's crops.
2. a. A factory's pollution harming nearby residents.
3. Government welfare payments.
4. Farm subsidies.
5. A model showing money and goods - services flow between households and firms.