61-handout

61-handout - 2/23/2010 Positive Externalities AS...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
2/23/2010 1 Positive Externalities AS Microeconomics A quick recap on externalities An externality exists when the action of one agent unavoidably affects the welfare of another agent. The affected agent may be a consumer, giving rise to a consumption externality, or a producer, giving rise to a production externalit externality
Background image of page 1

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

View Full DocumentRight Arrow Icon
2/23/2010 2 What are positive externalities? Positive externalities create benefits to third parties Activities said to generate positive externalities include: Social returns from investment in education & training Benefits from high quality public service broadcasting Positive benefits from health care and medical research Benefits from vaccination and immunization programmes Flood protection systems & fire safety equipment Restored historic buildings and monument Restored historic buildings and monuments Social benefits from protecting environmental resources External benefits from usage of public libraries and museums Externalities from inward migration of population Social benefits Where there are positive externalities the social benefit of production and/or consumption exceeds the private benefit
Background image of page 2
2/23/2010 3 Social benefits explained Private Benefits + External benefits = Social Benefits Benefits to individual consumers or firms of their economic activity Benefits to others of individual consumers or firms economic activity Total benefits to
Background image of page 3

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

View Full DocumentRight Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 9

61-handout - 2/23/2010 Positive Externalities AS...

This preview shows document pages 1 - 4. Sign up to view the full document.

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