Definition Chapter 14 & 15

The true (or full) costs consumption or production to society as a whole.

Goods or services which when consumed create positive spillover effects in an economy.

Goods or services which when consumed cause negative spillover effects in an economy.

The benefits of production and consumption enjoyed by a firm, individual or government

Occurs when the market forces of demand and supply are unsuccessful in allocating resources efficiently and cause external costs or external benefits

Occurs when the government sets a price above the market equilibrium price in order to encourage output of a certain good or service

The transfer of the ownership of assets from the public sector to the private sector.

Occurs when the government sets a price below the market equilibrium price in order to encourage consumption

Goods and services that are non-excludable and non-rivalrous, and which are a cause of market failure as there is a lack of a profit motive to produce them

The purchase of private sector assets by the government