Negative Externalities Flashcards
What are negative production externalities
Costs to 3rd parties as a result of the actions of producers
Examples of negative production externalities
Air pollution
Resource depletion
Resource degradation
Deforestation
What will be greater in negative production externalities
MSC > MPC
Which curve moves with production externalities
The costs curve (supply)
What are the causes of negative externalities in production
Self interest
Over production/consumption
Price too low
Misallocation of resources
What are negative consumption externalities
Costs to 3rd parties as a result of the actions of consumers
Examples of negative consumption externalities
Smoking
Excessive alcohol
Excessive sugary drinks/food
What will be less than in negative consumption externalities
MSB < MPB
Why is there negative consumption externalities
Self interest
Over consumption/production
Misallocation of resources
