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Economics
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Environmental economics
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Externality
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Day 7 Spillover or Externality: When the price paid for a good does not cover ALL the costs of use (e.g. gasoline) (they don?t go away, they exist and always are there and are paid for one way or another) Costs thus ?spill over? to 3rd parties who then must pay (negative) Are OVERPRODUCED Supply shifts to the left -> Taxes, Lawsuits, Fines, Regulations Economic activity that produced external benefits will tend to be under-produced. The demand curve which measures only private benefits, will not accurately reflect all benefits. The school subsidizes Aposhian to get the flu shot. List of every different kind of tax you pay in February: sales - 8.5%; regressive (burdens lower more than higher) corporation income - 34%; capital gains payroll

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