Microeconomics

Learn the toughest concepts covered in Microeconomics with step-by-step video tutorials and practice problems by world-class tutors

Externalities

Externalities: Social Benefits and Social Costs

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Have you ever considered if your purchases have effects on others? There may be costs or benefits you're not considering!

1

concept

Negative Externality and Positive Externality

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2

concept

Externalities on the Graph

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3
Problem

Which of the following is an example of a positive externality?

4
Problem

If the production of a good causes a negative externality, then the social-cost curve will lie ________________ the supply curve, and the socially optimal quantity is _________________ than the equilibrium quantity.

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Problem

Which of the following is true about externalities?