Externalities HW

If people took external benefits, such as cleaner air, into consideration when deciding how much to consume of goods that cause externalities: they would consume less. they would act in a way that is optimal from a societal perspective. the markets for these goods would generate greater surplus

I, II, and III

Part 1: Social costs are equal to: Part 2: When social costs exceed private costs, there is a:

Part 1: private costs plus external costs Part 2: negative externality

Video to watch a. A negative externality is when ____ leading to production of ______ output. b. When one more unit of a good is produced, producers pay input costs, and pollution costs are borne by others. The sum of these additional burdens on society are measured by the: c. When one more unit of a good is consumed, society is made better off. This is measured by the: d. When one more unit of a good is produced, producers pay for inputs such as wages, raw materials, and energy. These are measured by the: e. (picture attached for this) The socially optimal level of production is: But, the market will end up producing:

a. Blank 1: social costs exceed private costs Blank 2: too much b. marginal social cost c. marginal social benefit d. marginal private cost e. 100 units 200 units

When we add ____ benefits together, the result is called social benefit.

private and external