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.
External cost External benefit Externalities Negative externalities Positive externalities Marginal social cost of pollution Marginal social benefit of pollution Socially optimal quantity of pollution Coase theorem Transaction costs Internalize the externality Environmental standards Emissions tax Pigouvian tax Tradable emissions permits Pigouvian subsidy Technology spillover Positive feedback | an external benefit that results when knowledge spreads among individuals and firms. an uncompensated cost that an individual or firm imposes on others; also known as negative externality. external benefits. the additional gain to society as a whole from an additional unit of pollution. the quantity of pollution that society would choose if all the costs and benefits of pollution were fully accounted for. take into account external costs and external benefits. an uncompensated benefit that an individual or firm confers on others; also known as positive externality. a payment designed to encourage activities that yield external benefits. external benefits and external costs. rules established by a government to protect the environment by specifying actions by producers and consumers. put simply, success breeds success, failure breeds failure; the effect is seen with goods that are subject to network externalities. the proposition that even in the presence of externalities an economy can always reach an efficient solution as long as transaction costs are sufficiently low. the costs to individuals of making a deal. a tax that depends on the amount of pollution a firm produces. external costs. the additional cost imposed on society as a whole by an additional unit of pollution. licenses to emit limited quantities of pollutants that can be bought and sold by polluters. |