Externalities

Question 1

spillover effect

Answer 1

effect that one situation or problem has on another situation

Question 2

external costs definition

Answer 2

negative spillover effects of consumption or production - they affect third parties in negative ways

Question 3

third parties

Answer 3

someone who is not one of the two main people or organisations involved in an agreement or legal case

Question 4

external benefits definition

Answer 4

positive spillover effects of consumption or production - they bring benefits to third parties

Question 5

external costs examples

Answer 5

resource depletion, noise pollution, air pollution, water pollution, traffic congestion, overcrowding

Question 6

external benefits examples

Answer 6

education, healthcare, vaccinations

Question 7

private costs

Answer 7

costs of an economic activity to individuals and firms

Question 8

social costs

Answer 8

costs of an economic activity to society as well as the individual or firm

Question 9

private benefits

Answer 9

rewards to third parties of an economic activity, such as consumption or production

Question 10

social benefits

Answer 10

benefits of an economic activity to society as well as to the individual or firm