Positive And Negative Externalities In Consumption/ Production 4.1.8.4 Flashcards
1
Q
What do producers and consumers only consider
A
Their private costs and benefits
2
Q
Where on a graph is the socially optimum level of output
A
Where marginal social costs = marginal social benefits
3
Q
When do positive externalities occur
A
When there is an impact on third parties because of production activities
Can be positive or negative
4
Q
A
5
Q
What are private costs
A
Costs incurred by a firm for wages, rent and raw materials
6
Q
When do consumption externalities occur
A
When there is impact on third parties because of consumption activities
Can be positive/ negative
