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You are walking into a store when a man bumps into you.You think, "What a jerk!" until you realize that he actually bumped into you while catching a sidewalk display that was about to fall on your head.You sheepishly thank him for saving you and realize that by initially thinking that he was a "jerk," you were illustrating
Negative Externality
A cost that affects a party who did not choose to incur that cost, typically resulting from economic activity by another party.
Marginal Social Cost
The total cost to society of producing an additional unit of a good or service, including both private costs and external effects.
External Social Cost
Costs of production or consumption that affect individuals not involved in the transaction, often unaccounted for by the market price.
Efficient Level
Describes a state where resources are allocated in the most effective manner, maximizing output and outcomes.
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