Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.
Internalize the externality Socially optimal quantity of pollution Externalities Environmental standards Positive externalities Tradable emissions permits Marginal external benefit (MEB) of pollution Positive feedback Technology spillover Transaction costs Emissions tax Marginal private benefit (MPB) of pollution Coase theorem Marginal social benefit (MSB) of pollution External benefit Pigouvian tax Marginal external cost (MEC) of pollution Negative externalities Marginal private cost (MPC) of pollution Marginal social cost (MSC) of pollution Pigouvian subsidy External cost | is an external benefit that results when knowledge spreads among individuals and firms. the costs to individuals of making a deal even in the presence of externalities an economy can always reach an efficient solution as long as transaction costs—the costs to individuals of making a deal—are sufficiently low. is a payment designed to encourage activities that yield external benefits. is the quantity of pollution that society would choose if all the costs and benefits of pollution were fully accounted for. is the additional cost imposed on the polluter if the polluter creates another unit of pollution. when success breeds greater success and failure breeds further failure. is the additional benefit others receive if the polluter creates another unit of pollution. is the additional benefit the polluter receives if the polluter creates another unit of pollution. is the additional cost imposed on society as a whole by an additional unit of pollution. is a tax that depends on the amount of pollution a firm produces. is a benefit that an individual or firm confers on others without receiving compensation. When individuals take external costs or benefits into account is the additional cost imposed on others if the polluter creates another unit of pollution. External costs and benefits is the additional gain to society as a whole from an additional unit of pollution. External costs is an uncompensated cost that an individual or firm imposes on others. are licences to emit limited quantities of pollutants that can be bought and sold by polluters. Taxes designed to reduce external costs. external benefits are rules that protect the environment by specifying actions by producers and consumers. |