Course

Externalities

Instructor: Alex Tabarrok, George Mason University

This is " An Introduction to Externalities " from our Principles of Economics: Microeconomics course. What are externalities and what are the different kinds of

This is "An Introduction to Externalities" from our Principles of Economics: Microeconomics course.

What are externalities and what are the different kinds of costs? And what does this have to do with the rise of “superbugs"? This video is an introduction to externalities, including the concepts of private cost, external cost, and social cost. Using the example of antibiotics and viruses, we take a look at how costs are passed along to different members of society beyond the producer and consumer. We’ll use a chart to illustrate how to calculate the effects of a Pigouvian tax, and we provide definitions for the other key terms.

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