Externalities - 4 Key Diagrams I A Level and IB Economics

​In this revision video we look at externalities in production and consumption. In most markets, there are both positive and negative externalities to consider, so the net social benefit or net social cost becomes an important aspect of the analysis and evaluation.
#aqaeconomics #ibeconomics #edexceleconomics

[@monatahan635]

Studying this in the exam waiting hall. Such amazing revision

[@tutor2u-official]

Hope it went well for you!

[@etiennelegtmann8716]

Hi, as an edexcel student I have been told that negative externalities of consumption and positive externalities of production cannot be drawn. In that case how can I tackle a question about these externalities without drawing the diagram.

[@cynthiaamidi2459]

Pretty sure you need to learn the diagrams for Edexcel too. Better safe than sorry, all the best!

[@hmwh4t]

Is this an effective diagram for A level, or mainly AS (to use in the middle of 25 markers, 15 etc for aqa)

[@tutor2u-official]

All good for A-level!

[@marksalisson4050]

Positive Production Externality has a social optimum at MSC=MSB at point B, then the label on the graph is wrong and is meant to be 'MSB/MPB' instead of 'MPB' alone

[@tutor2u-official]

Thanks - will check

[@bob820]

Hi, does it matter whether shifts are parallel or pivoted? Ive seen both

[@tutor2u-official]

Doesn't matter Bob

[@bob820]

@@tutor2u-official Ok sorry but another question. In the 2021 Edexcel paper 1, 8 marker-they shifted MSC downwards, to show a fall in negative externalities. I shifted MPC upwards to show the same thing. Am I wrong?

[@anonymousdog2496]

Your explanation is wrong. Your diagram states that the MSC and the MSB output is higher than the Free Market Equilibrium, but you said that it is lower, How does this affect the theory?

[@riccardoeugeni3640]

Hi James, the diagram clearly states that MSC/MSB output is lower than free market equilibrium (Q2 < Q1)

[@NightDawnDusk]

haha you got ratioed

[@rashidalouat9302]

@@NightDawnDusk simply grow up

[@rashidalouat9302]

*respectfully