Cambridge AS & A Level Economics
7.4Private costs and benefits, externalities and social costs and benefits
Private costs and benefits, externalities and social costs and benefits in Cambridge AS & A Level Economics: what the syllabus expects you to know, the learning objectives and how to practise.
Subtopic46 practice questions2 lessons
Learning objectives
What the syllabus expects you to be able to do.
- 7.4.1Define and calculate social cost as private plus external cost, including the marginal versions.
- 7.4.2Define and calculate social benefit as private plus external benefit, including the marginal versions.
- 7.4.3Define positive and negative externalities.
- 7.4.4Explain positive and negative externalities of consumption and production.
- 7.4.5Explain the deadweight welfare losses arising from positive and negative externalities.
- 7.4.6Explain asymmetric information and moral hazard.
- 7.4.7Use costs and benefits to analyse decisions (net present value is not required).
Lessons
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Cost-benefit analysis: weighing the full costs and benefits of a project
60 min
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Externalities: private, external and social costs and benefits
60 min
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Sample question
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