chapter 8 Flashcards
1
Q
private costs
A
costs that are borne by the producer of a good or service
2
Q
external cost
A
the value of a negative externality borne by those who do not produce the good or service
3
Q
social cost
A
the full cost of producing a good or service, including the producer’s private cost and all the external cost
4
Q
cap and trade system
A
a pollution reduction scheme in which the governemtn sets an overall limit(cap) on the amount of pollution that can be emitted and then allows polluters to negotiate about who will get to pollute via a system of tradable pollution permits.
