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Social costs and benefits (Government Laws and Regulations (Laws and…
Social costs and benefits
Benefits
Social Benefits
Private Benefits
Costs
Social Costs
Private Costs
Use of resources
Economic
Will raise economic welfare because social benefit is greater than its social cost.
Uneconomic
if its total social cost exceeds total social benefit. Better to allocate resources elsewhere.
Government Laws and Regulations
Laws and Regulation
Increase private costs and reduce profits but reduces social costs and negative externalities.
Taxation
Reduces consumer demand
Subsidies
Encourage production of certain goods or services that people wouldn't want to produce by reducing the costs of production. Or to lower price
There are also + & - externalities (forced on others)