question
consumer surplus when there are externalities= Qmarket and Pmarket
answer
area under demand curve subtended by Pmarket
question
consumer surplus at P Q
answer
area under demand curve subtended by P*
question
Change in consumer surplus
answer
total consumer surplus minus the difference between the CS at Pmarket and CS P*
question
Producer surplus at Q*
answer
area above the supply curve below P*
question
Producer surplus at Qmarket
answer
the area above the supply curve and below Pmarket
question
cost to society
answer
area under the social cost curve bound by Qmarket
question
amount recieved by sellers
answer
Qmarket times Pmarket
question
producer surplus at Qmarket
answer
(area under Pmarket and above the SC curve) minus (the area under the SC curve bound by Pmarket below and Qmarket on the right side)
question
internalizing an externality
answer
altering incentives so that people take account of the external effects of their actions
question
Pigouvian taxes
answer
named after Arthur Cecil Pigou, these are corrective taxes are intended to correct the effects of negative externalities.
question
corrective tax on pollution
answer
sets the price of pollution which, together with the demand curve, determines the quantity of pollution
question
pollution permits
answer
pollution permits set the quantity of pollution which, together with the demand curve, determines the price of pollution
question
coase theorem
answer
Ronald Coase: the preposition that if two parties can bargain without transaction costs they can solve the problem of externalities on their own
question
transaction costs
answer
the costs incurred in the process of the agreeing and following through on a bargain
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
