Externalities Flashcards
1
Q
Positive externality
A
Positive third party spill over effects that were no accounted for by the price mechanism eg social benefits are higher than privet benefits
2
Q
Negative externality
A
Negative third party spill over effects that were unaccounted for by the price mechanism eg social costs are higher than private costs
3
Q
Private benefits
A
Benefits internal to an exchange accounted for by the price mechanism
4
Q
Private benefits
A
benefits internal to an exchange accounted for by the price mechanism
5
Q
Social benefit
A
External benefit + Private benefit
6
Q
Social costs
A
External costs + Private costs
