1.1.6 Externalities Flashcards
1
Q
What is the merit good is?
A
Products that benefit for people but they are under-consumed
2
Q
What is the formula of social benefit?
A
Social benefit = private benefit + external costs
3
Q
What does externalities means?
A
Effect to a third side from the production or consumption of a good
4
Q
What is the formula of social costs?
A
Private costs + external costs
5
Q
What is external benefits?
A
A positive effect ( externalities )
