External Costs People make decisions to maximize their personal welfare, balancing private benefits and private costs.
{"Image DocumentName": "External CostsPeople make decisions to maximize their personal welfare, balancing private benefits and private costs.", "Image ImageDescription": "True for the buyer; true for the producer. If third parties (not buyers and not producers) suffer a cost due to these private decisions, these are external costs. External costs are real. External costs plus private costs equal the total costs to society. This is the basic argument in the discussion of a negative externality. Society includes nonbuyers and nonsellers in the mix. The market does not. If third parties suffer a cost (i.e., they live with the pollution), then society has higher costs than the market.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}