A negative externality is road congestion which in turn brings about many other negative problems such as the traffic congestion. When more and more people start to buy cars, it will come to a point beyond whereby additional road user (driver) will cause third parties to incur some costs as the road started to get congested.

When this happens, the people in the cars as well as the people(third parties) on the public transport will be stuck in the jam in the peak hours in the morning at expressways. As such, the employers of these drivers will suffer productivity loss due to them coming in late. The employees will also be in a difficult situation whereby coming in late for work puts them in a bad light. Students who are going for their lessons will also be affected by the traffic congestion. Not only will the students' attendance be affected, they will also suffer as they will miss the lessons that the lecturers has already begun with. This in turn might affect their exams.

done by: Chia Sing Yee, T02

Labels: externality

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