Positive Externality(characteristics)
1. People are willing to sell condos for less than they should be because of high information cost (it is hard to know if a particular feature of a condo is good or bad)
2. Many of the things in question are nonexcludable - e.g. the recreation areas are open for everyone to use.
3. Many of the things in question are nonrival-e.g. viewing a pleasant scene by one person doesn't prevent others from gaining full benefit from it

Negative Externality(characteristics)
1. People are willing to pay more than they should be because of high information cost (it is hard to know if a particular feature of a condo is good or bad)
2. Many of the things in question are nonexcludable - e.g. the laundry room is open for everyone to use.
3. Many of the things in question are nonrival-e.g. use of the mailboxes by one person doesn't prevent others from gaining full benefit from them

1) How has the positive externality affected the economy?
The positive externality has caused difficulties in pricing condominiums. Some sellers are perplexed about why their condos aren't selling at the same price as one nearby, when it seems to have the same characteristics. Others set their prices too low, because they don't realize some of the positive things their condo has to offer.

2) In tropical agriculture, the lowland farms experience increased costs of production because of the activities of the upland farm. Prices of goods from the upland farm will not be as high as they should be because they are artificially lowering that price by subjecting the lowland farms with part of the cost of their production. The lowland farms' products will likewise be higher than they should be.

In the housing market, the negative externalities will cause houses to be overvalued. Lenders may lend the condo owners more than they should, and then when the condo owner attempts to sell his condo, he may not be able to get enough money to pay back the loan. Also, statistical measures of houses and sale properties will be biased. This could have far-reaching affects on government programs and educational endeavors.