positive externalities in production/consumption

Question 1

what is a positive externality

Answer 1

-benefits to third parties as a result of separate agent

Question 2

positive externality in consumption: what it is, examples, graph and why it happens and what

Answer 2

-benefits to third parties as a result of the actions of consumers actions
-healthcare (won’t pass on flu or cost NHS), education (productive, more tax), exercise (higher prod of workers, at work more often)
-MSB>MPB, triangle that points to social optimum
-self-interest, underconsumption, misallocation of resources

Question 3

positive externality in production: what it is, examples, graph and why it happens and what

Answer 3

-benefits to third parties as a result of producers actions
-in-work training-can poach workers, r and d can be copied by 3rd party firms
-MSC<MPC, pointing at socially optimum level, social is always star
-self interest, underproduction, misallocation of resources

Question 4

what is a negative externality

Answer 4

costs to third parties as the result of a separate agent

Question 5

negative externality in production: what it is, examples, graph and why it happens and what

Answer 5

-costs to third parties as the result of production
-air pollution, resource depletion/degradation, deforestation
-MSC>MPC, dwl points at social optimum, MSC>MPC, p star at MSC
-self interest, overproduction/consumption, welfare loss at social optimum, price too low, misallocation of resources

Question 6

negative externality in consumption: what it is, examples, graph and why it happens and what

Answer 6

-costs to third parties as a result of consumption
-smoking, excessive alcohol, poor diet
-MSB<MPB, p star at MSB
-self-interest, over production/consumption, misallocation of resources