MCS 1000 Chapter Notes - Chapter 16: Marginal Cost, Marginal Utility, Social Cost

• School: University of Guelph
• Department: Marketing and Consumer Studies
• Course: MCS 1000
• Professor: Sergio Meza

Document Summary

Externality is a cost of or a benefit from an action that falls on someone other than the person or firm choosing the action. An externality that imposes a cost is called a negative externality. An externality that imposes a benefit is called a positive externality. Burning coal to generate electricity emits carbon dioxide that is warming the planet. The cost of which are tolerated by everyone, and even by future generations. When your neighbour plants and maintains a beautiful fenced garden which you get to enjoy at a virtually zero cost. Smoking in public where other people are around which generates health risks. When you get a flu vaccine, you lower your risk of getting the flu and your neighbours who did(cid:374)"t get the (cid:448)a(cid:272)(cid:272)i(cid:374)e has a (cid:271)etter (cid:272)ha(cid:374)(cid:272)e of re(cid:373)ai(cid:374)i(cid:374)g healthy. A private cost of production is a cost that is borne by the producer of a good or a service.