Econ Externalities

Negative Production

Two cost or “Supply“ curves. One to the left is socially optimal, to the right is free market. DWL triangle will always point to the left/to socially optimal price/quantity point.

Negative Consumption

Two benefit or “Demand“ curves. One to the right is free market, to the left is socially optimal. DWL triangle will always point to the left/to socially optimal price/quantity point.

Positive Consumption

Two benefit or “Demand” curves. One to the right is socially optimal, to the left is free market. DWL triangle will always point to the right/to socially optimal price/quantity point.

Positive Production 

Two cost or “Supply“ curves. One to the left is free market, to the right is socially optimal. DWL triangle will always point to the right/to socially optimal price/quantity point.

Pigouvian tax

a tax on an activity that creates a negative externality, meaning a cost to society not borne by the producer or consumer. The purpose is to make the price of a good or service reflect its full social cost by raising the price to an efficient level. This encourages more responsible behavior, such as reducing pollution or discouraging consumption of harmful goods like tobacco and alcohol

Pigouvian subsidy

correct for a positive externality, encouraging an activity that provides a societal benefit that isn't captured in the private market. It works by making the private market price closer to the social benefit, typically by lowering the cost for consumers and/or increasing revenue for producers, which leads to an increase in the production and consumption of goods or services with positive externalities, like vaccinations or public education

Comparative Advantage

Divide the second value of the ratio by the first value. First value should be what you’re trying to find the comparative advantage for.

Growth Rate

(2nd GDP - 1st GDP) / 1st GDP or Base Year