Externalities

Question 1

what is spillover effect

Answer 1

the effect that one situation or problem will have on another

Question 2

what are external costs

Answer 2

negative spillover effects of production or consumption that will effect a third party

Question 3

what are some external costs (6)

Answer 3

noise pollution
resource depletion
air pollution
water pollution
overcrowding
traffic congestion

Question 4

what is the pnemonic to remember external costs

Answer 4

ROT WARN

Question 5

what are external benefits

Answer 5

positive spillover effects of production/consumption which benefit third parties

Question 6

what are some external benefits of education

Answer 6

• increased skillsets
• increased productivitu
• household mobility
• better jobs
• increased standard of living if more doctors etc
• lower unemployment

Question 7

what are some external benefits of healthcare

Answer 7

• personal health improvment
• less sick days off work
• more efficient work

Question 8

what are some external benefits of vaccinations

Answer 8

• probability of disease contraction lowers
• lowers for non vaccinated aswell
• less sick days off work