Externality Flashcards
1
Q
Externalities
A
An externality occurs when the production or consumption of a good or service creates external costs and/or external benefits. These side effects are known as externalities.
2
Q
Private Costs
A
These refer to the cost of the user of the product/service
3
Q
Social costs
A
These refer to the cost to society as a whole due to the product or service.
4
Q
Private benefits
A
These refer to the benefits to the individual of the good or service
5
Q
Social benefits
A
These refer to the benefits to society as a whole of the good or service.
6
Q
A
