Asymmetric information occurs when one person or group in a deal has more or better information than the
Glossary Category: Economics
social benefits
Social benefits refer to the total value gained by society from the production or consumption of a product
social costs
Social costs represent the total burden placed on society due to the production or consumption of a specific
deadweight welfare losses
Deadweight welfare loss (also known as deadweight loss) refers to the net loss of economic well-being that happens
negative externality
A negative externality happens when the production or use of a product creates harmful effects for people who
positive externality
A positive externality happens when the production or use of a product or service gives benefits to other
externalities
Externalities, also known as spillover effects, occur when producing or consuming a good or service impacts a third
private benefits
Private benefits are the advantages received directly by an individual person or a business from consuming or producing
private costs
Private costs are the expenses a business or individual must pay to produce a good or service. These
reasons for market failure
Market failure occurs when a free market fails to distribute resources efficiently, leading to outcomes that do not