Microeconomics Ch 9&10

The uncompensated impact of one person's actions on the well-being of a bystander

Altering incentives so that people take account of the external effects of thier actions.

A tax designed to induce private decision makers to take account of the social costs that arise from a negative externality.

The proposition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on thier own.

The costs that parties incur in the process of agreeing to and following through on a bargain.

The price of a good that prevails in the world market for that good.

A tax on goods produced abroad and sold domestically.