Concept #1: Negative Externality and Positive Externality
Concept #2: Externalities on the Graph
Practice: Which of the following is an example of a positive externality?
Practice: If the production of a good causes a negative externality, then the social-cost curve will lie ________________ the supply curve, and the socially optimal quantity is _________________ than the equilibrium quantity.
Practice: Which of the following is true about externalities?