Example of a positive externality that is derived from consumption is Education, and that from production is R&D. When society receives better education, this in turn will benefit the country as a whole as more foreign direct investments will flow into the country, thus increasing employment and income. When a company engages in R&D, the discovery of new production technology can be adopted by other firms in the industry.
Negative externalities are costs that third parties has to bear when a good is consumed or produced.
Example of an externality that results from consumption is road congestion, and that from production is pollution. When society consume the "usage of roads", it will come to a point beyond which additional road user (driver) will cause third parties to incur some costs as the road started to get congested. When this happens, the employers of these drivers will suffer productivity loss due to them coming in late. When firms engage in the production of goods in their manufacturing plants, hazardous gases may be released into the atmosphere, thus leaving the society having to bear the brunt of additional medical costs.
