Lesson 17 - Externalities Flashcards
1
Q
what are the private costs of consuming and producing?
A
costs created by those consuming and producing
2
Q
what are the private benefits of consuming and producing?
A
benefits received by those consuming and producing
3
Q
what are the social costs of consuming and producing?
A
the total cost to society (includes externalities)
4
Q
what are the social benefits of consuming and producing?
A
the total benefits (includes externalities)
5
Q
what are externalities?
A
the knock on effects of the consumption of a good/service, that impacts third parties
6
Q
describe merit goods
A
- under consumed
- positive externalities
7
Q
describe demerit goods
A
- overconsumed
- negative externalities
