positive externalities Flashcards
what are positive externalities
benefits which affect third parties outside the price mechanism
what is the supply curve equal to
marginal cost curve
what is our demand curve equal to
margibal benefit curve
social cost formula
private cost + external costs
social benefit formula
private benefit + external benefit
how to calculate welfare
social benefit - total cost
Private benefits
A benefit to a consumer inside the price mechanism
Positive externalities (or external benefits)
Benefits to third parties outside the price mechanism
Write the definition of: Positive consumption externalities (or external benefits of consumption)
When the consumption of a good creates benefits to third parties outside the price mechanism.
Positive production externalities (or external benefits of production)
Positive production externalities (or external benefits of production)
