negative externalities

Question 1

what are negative externalities

Answer 1

costs which affect third parties outside the price mechanisms

Question 2

Write the definition of: Private costs

Answer 2

A cost to a producer or consumer inside the price mechanism.

Question 3

Write the definition of: Tradable pollution permits

Answer 3

Permits which allow firms to pollute up to a certain limit. These permits can then be traded between firms.

Question 4

Negative consumption externalities (or external costs of consumption)

Answer 4

When the consumption of a good creates costs to third parties outside the price mechanism.

Question 5

Negative production externalities (or external costs of production)

Answer 5

When the production of a good creates costs to third parties outside the price mechanism

Question 6

Write the definition of: Tradable pollution permits

Answer 6

permits which allow firms to pollute up to a certain limit. These permits can then be traded between firms.

Question 7

Write the definition of: Minimum price

Answer 7

The lowest price a good can be legally sold for.