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What is a Negative Externalities
when production and/or consumption impose external costs on third parties outside the market for which no appropriate compensation is paid
Give an example of a negative production externality associated with industries.
Air pollution from factories.
What is an example of a negative consumption externality involving waste management?
Fly-tipping of house waste.
What does MSC stand for and what does it represent?
Marginal Social Cost; it represents the total cost to society of producing one more unit of a good.
What does MPC stand for and what does it include?
Marginal Private Cost; it includes the cost to a producer for producing one more unit of a good, excluding external costs.
What is MPB and what does it signify?
Marginal Private Benefit; it signifies the benefit received by a consumer for consuming one more unit of a good, excluding external benefits.
What does MSB represent?
Marginal Social Benefit; it represents the total benefit to society from consuming one more unit of a good.
What is meant by social welfare loss in economic terms?
It occurs when the market output supplied is higher than the social optimum.
List an example of a negative consumption externality linked to health issues.
Alcohol addiction.
Which type of pollution is associated with vehicle emissions?
Negative consumption externality.
