A shift from S1 to S2 reflects the change that happens when a negative externality is taken into account. A shift from D1 to D2 reflects the change that happens when a positive externality is taken into account.
-Refer to the above figures. Externalities exist in both panels. After correcting for the externalities the prices should be
Definitions:
Self-conscious Emotions
Emotions that involve reflection on oneself, such as embarrassment, pride, shame, and guilt.
Stress
A physical or psychological response to internal or external pressures, challenges, or threats.
Social Referencing
The behavior in which individuals look to others in their environment to seek clues for how to react or behave in certain situations or towards novel objects.
Infant
A very young child or baby, typically under one year old.
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