Externalities & Pollution

Not in my backyard
Not in my backyard

Externalities, or the effect of economic activity on a third party, can lead to undesirable consequences like pollution. Oil spills, like the one caused by British Petroleum in the Gulf of Mexico in 2010, are a prime example. Even though BP and its customers each benefit from the production of oil, others along the Gulf coast had their lives severely disrupted.

Real World Examples

Advice for Students
Anonymous asked:

What is the definition of the social optimum?

Dirk Deciphers: The social optimum is the best P and Q combination for... more
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Who's Dirk?
More on the man, himself. Meet Dirk
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