Key Terms

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.

Question

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Marginal social cost of pollution, p. 276

Marginal social benefit of pollution, p. 276

Socially optimal quantity of pollution, p. 276

External cost, p. 278

External benefit, p. 278

Externalities, p. 278

Negative externalities, p. 278

Positive externalities, p. 278

Coase theorem, p. 280

Transaction costs, p. 280

Internalize the externality, p. 280

Environmental standards, p. 282

Emissions tax, p. 282

Pigouvian tax, p. 284

Tradable emissions permits, p. 285

Pigouvian subsidy, p. 289

Technology spillover, p. 289

Excludable, p. 291

Rival in consumption, p. 291

Private good, p. 291

Nonexcludable, p. 291

Nonrival in consumption, p. 292

Free-rider problem, p. 292

Public good, p. 293

Cost-benefit analysis, p. 297

302