Consumption benefits and underuse
도입됨| English | 의미 |
|---|---|
| marginal external benefit/ˈmɑːdʒɪnl ekˈstɜːnl ˈbenɪfɪt/ | 외부 한계 수익 |
| marginal social benefit/ˈmɑːdʒɪnl ˈsəʊʃl ˈbenɪfɪt/ | 사회적 한계 수익 |
A decision you can investigate
- A vaccination protects its recipient and may reduce infection risk for other people. Education can benefit its learner and generate spillovers.
- Count the private return separately from the uncompensated gain to others.
Build the explanation
- Private benefit goes to the chooser; external benefit goes to third parties outside the transaction. Social benefit is private plus external benefit. In a positive consumption externality model, MSB lies above MPB; MPC=MSC if provision has no external production effect. The market may consume too little because individuals compare their own benefit with price.
- For a negative consumption externality, such as uncompensated disturbance from late-night use, MSB lies below MPB and market quantity can exceed the social optimum. This benefit-side diagram and the production cost-side diagram represent different causal mechanisms; do not switch labels just because the desired quantity change is similar.
Work through the evidence
- Let MPB=80−Q and MPC=MSC=20+Q. Private equilibrium solves 80−Q=20+Q, giving Qm=30. Suppose each use benefits others by 20: MEB=20 and MSB=MPB+MEB=100−Q. The optimum solves 100−Q=20+Q, giving Q*=40.
- At Qm, MSB=70 and MSC=50, a gap of 20. The missed net gain from Q30 to Q40 is loss=½ × (40−30) × 20=100 currency units. It is a potential welfare gain if those additional units can be provided at the modeled cost. For an alternative external consumption cost of 20, MSB=MPB−20=60−Q, and Q*=20: private output 30 would be excessive.
What is the market quantity without the modeled spillover being priced?
난이도 1/5 · 100 코인 + 오늘 첫 완료 시 소액 보너스
Private benefit equals private cost at 30.
Which benefit is mainly private in the education example?
난이도 1/5 · 100 코인 + 오늘 첫 완료 시 소액 보너스
Earnings accrue directly to the learner; separate them from benefits to others.
Every benefit of education or health care is an external benefit.
난이도 1/5 · 100 코인 + 오늘 첫 완료 시 소액 보너스
Many gains accrue to the recipient; only the uncompensated third-party effects are external.
Test the limits
- Higher lifetime earnings are mainly a private education benefit, while knowledge shared with others may be an external benefit. A clinic’s treatment cost is private production cost, not an external benefit merely because the service is health care. Vaccination effects depend on disease, uptake and effectiveness; no numeric real-world effectiveness is claimed here.
- Education, health, transport, environmental quality and financial stability need a named third-party effect. A merit-good information argument can coexist with an externality, but it is a different mechanism and should be evaluated separately.
What is the potential net gain from correcting modeled underuse?
난이도 1/5 · 100 코인 + 오늘 첫 완료 시 소액 보너스
½ × 10 × 20 = 100, assuming the stated benefit and cost curves.
Apply and explain your answer
- Why can a subsidy help in this model but not prove that every health subsidy is efficient?
- It may increase use toward Q40, but size, targeting, funding, administrative costs and actual external benefits determine the net result.
Match the terms to their meanings.
난이도 2/5 · 140 코인 + 오늘 첫 완료 시 소액 보너스
Use each term for its stated economic relationship.
Use the terms precisely
- marginal external benefit 边际外部收益: Uncompensated third-party benefit from one additional unit.
- marginal social benefit 边际社会收益: Marginal private benefit plus marginal external benefit, net of external consumption costs.
Let MPB=80−Q and MPC=MSC=20+Q. Private equilibrium solves 80−Q=20+Q, giving Qm=30. Suppose each use benefits others by 20: MEB=20 and MSB=MPB+MEB=100−Q. The optimum solves 100−Q=20+Q, giving Q*=40. At Qm, MSB=70 and MSC=50, a gap of 20. The missed net gain from Q30 to Q40 is loss=½ × (40−30) × 20=100 currency units. It is a potential welfare gain if those additional units can be provided at the modeled cost. For an alternative external consumption cost of 20, MSB=MPB−20=60−Q, and Q*=20: private output 30 would be excessive.
Higher lifetime earnings are mainly a private education benefit, while knowledge shared with others may be an external benefit. A clinic’s treatment cost is private production cost, not an external benefit merely because the service is health care. Vaccination effects depend on disease, uptake and effectiveness; no numeric real-world effectiveness is claimed here. Education, health, transport, environmental quality and financial stability need a named third-party effect. A merit-good information argument can coexist with an externality, but it is a different mechanism and should be evaluated separately.
Private benefit goes to the chooser; external benefit goes to third parties outside the transaction. Social benefit is private plus external benefit. In a positive consumption externality model, MSB lies above MPB; MPC=MSC if provision has no external production effect. The market may consume too little because individuals compare their own benefit with price.