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AP Microeconomics Flashcards: Externalities

Study Externalities in AP Microeconomics with focused flashcards that help you recognize the idea, recall the key rule, and apply it in practice-style prompts.

QUESTION

What is the impact of negative externalities on social welfare?

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ANSWER

They decrease social welfare. Harmful spillover effects reduce overall social well-being.

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AP Microeconomics: Market Failure and Role of Government

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What this deck covers

This deck focuses on Externalities, giving you a quick way to review the definitions, rules, and examples that matter most for AP Microeconomics.

How to use these flashcards

Work through these flashcards in short sessions. Try to answer each prompt before flipping the card, then revisit any cards you miss until the explanation feels automatic.

Practice questions

1 of 24Practice questions for this set
A market for education (years of schooling) creates a positive externality because more educated workers raise productivity and civic participation. Based on the externality shown in the graph, is the market outcome socially efficient? Curves (linear):
  • Demand: D=MPB:P=90−3QD=MPB: P=90-3Q
  • Social benefit: MSB:P=120−3QMSB: P=120-3Q
  • Supply: S=MPC=MSC:P=0+3QS=MPC=MSC: P=0+3Q
(Price/Cost on vertical axis; Quantity of years of schooling (in millions) on horizontal axis.)
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