chp 10 Flashcards
1
Q
externality
A
when a transaction between a bywr and seller directly affects a third party.
2
Q
if yield a negative externality
A
The social optimal quantity is less than the equilibrium quantity
3
Q
if yield a positive externality
A
social optimal quantity is greater than the equilibrium quantity
4
Q
permits and corrective taxes…
A
corrects externalities
5
Q
Coase Theorum
A
if people bargan without cost thn they can reach an efficient agreement
