Externalities Flashcards
1
Q
What is a Positive Externality?
A
Benefits arising from a decision are experienced by third parties who were not involved in making the decision.
2
Q
Social costs =
A
Private Costs + External Costs
3
Q
Social costs =
A
Total cost to society
4
Q
Private costs=
A
faced / paid directly by the producer or consumer
5
Q
External costs=
A
negative externalities
6
Q
Social Benefits=
A
Private benefits + Ecternal benefits
7
Q
Social benefits=
A
Total benefit to society from producing or consuming a good/service.
8
Q
Private benefits=
A
The direct benefit to the consumer
9
Q
External benefits=
A
Positive externalities
