Economics A-Level
Externalities and Social Welfare
What Externalities and Social Welfare means in Economics A-Level, as defined for Pearson Edexcel.
Definition of Externalities and Social Welfare
Analysis of the divergence between marginal private costs/benefits and marginal social costs/benefits, leading to over-consumption of demerit goods and under-consumption of merit goods.
Topics that use Externalities and Social Welfare
- Market failure (Pearson Edexcel A-Level)
Related terms
Using Externalities and Social Welfare in the exam
Definition questions usually carry one or two marks, and examiners look for the precise wording. Write the definition from memory, check it against the version above, and then use the term in a longer answer on the same topic so it sticks.
Practise Economics questions
Create a free account to answer exam-style questions on this topic and get feedback on your answers.
Start free
All Economics A-Level terms7 days Premium · Then free forever · No card, no charge