Chapter 32 Terms 102 - E nvi ronmental Economics A...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Environmental Economics: Addressing the difference between private costs and social costs. Private Costs: also called internal costs, are costs incurred by individuals when they use scarce resources. Social costs: are the full costs that society bears when a resource-using action occurs. For example, the social cost of driving a car is equal to all of the private costs such as buying gasoline plus any additional cost that society bears, such as air pollution and traffic congestion. Externalities: A situation in which a private cost or benefit diverges from a social cost or benefit, that is, the cost or benefits of an action are not fully borne by the two parties engaged in exchanges or by an individual engaging in a scarce resource-using activity. Correcting for Externalities: The signals in the economy must be changed so that decision-makers will take into account all the costs of their actions. A.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 06/06/2011 for the course ECON 102 taught by Professor Dsilvia during the Fall '11 term at Moraine Valley Community College.

Page1 / 3

Chapter 32 Terms 102 - E nvi ronmental Economics A...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online