1.1.6 Externalities

Question 1

What is the merit good is?

Answer 1

Products that benefit for people but they are under-consumed

Question 2

What is the formula of social benefit?

Answer 2

Social benefit = private benefit + external costs

Question 3

What does externalities means?

Answer 3

Effect to a third side from the production or consumption of a good

Question 4

What is the formula of social costs?

Answer 4

Private costs + external costs

Question 5

What is external benefits?

Answer 5

A positive effect ( externalities )