| Externality | no attested term | 外部性 (wàibùxìng) | 외부효과 (oebu hyogwa) | A cost or benefit affecting a third party who did not choose to be involved in the transaction that caused it. |
| Negative Externality | no attested term | 负外部性 (fù wàibùxìng) | 부정적 외부효과 (bujeongjeok oebu hyogwa) | A cost imposed on a third party, such as pollution, that is not reflected in the market price. |
| Positive Externality | no attested term | 正外部性 (zhèng wàibùxìng) | 긍정적 외부효과 (geungjeongjeok oebu hyogwa) | A benefit received by a third party, such as from education or vaccination, that is not reflected in the market price. |
| Marginal Private Cost (MPC) | no attested term | 边际私人成本 (biānjì sīrén chéngběn) | 한계사적비용 (hangye sajeok biyong) | The cost to the producer of making one more unit of a good, ignoring any cost imposed on others. |
| Marginal Social Cost (MSC) | no attested term | 边际社会成本 (biānjì shèhuì chéngběn) | 한계사회적비용 (hangye sahoejeok biyong) | The full cost to society of one more unit of a good: marginal private cost plus any external cost. |
| Marginal Private Benefit (MPB) | no attested term | 边际私人收益 (biānjì sīrén shōuyì) | 한계사적편익 (hangye sajeok pyeonik) | The benefit to the consumer of using one more unit of a good, ignoring any benefit gained by others. |
| Marginal Social Benefit (MSB) | no attested term | 边际社会收益 (biānjì shèhuì shōuyì) | 한계사회적편익 (hangye sahoejeok pyeonik) | The full benefit to society of one more unit of a good: marginal private benefit plus any external benefit. |
| Social Optimum | no attested term | 社会最优 (shèhuì zuìyōu) | 사회적 최적 (sahoejeok choejeok) | The quantity at which marginal social benefit equals marginal social cost (MSB = MSC): the best level of output for society as a whole, once external costs and benefits are counted. |
| Market Failure | no attested term | 市场失灵 (shìchǎng shīlíng) | 시장실패 (sijang silpae) | A situation where the free market allocates resources inefficiently, producing too much or too little of a good. |
| Deadweight Welfare Loss | no attested term | 福利无谓损失 (fúlì wúwèi sǔnshī) | 사회후생 손실 (sahoe husaeng sonsil) | The loss of total economic welfare that occurs when the market produces at a quantity other than the socially optimal level. |
| Pigouvian Tax | no attested term | 庇古税 (Bìgǔ shuì) | 피구세 (piguse) | A tax set equal to the external cost of a negative externality, intended to bring private and social cost into line. |
| Indirect Tax | no attested term | 间接税 (jiànjiē shuì) | 간접세 (ganjeobse) | A tax on spending, collected from the seller. Here, a tax on each unit sold shifts supply up from S1 to S2; set equal to the external cost, it is a Pigouvian tax. |
| Specific Tax | no attested term | 从量税 (cóngliàng shuì) | 종량세 (jongnyangse) | An indirect tax of a fixed amount on each unit sold, such as $2 a litre. It shifts the supply curve up by the same amount at every quantity, so S2 is parallel to S1. |
| Ad Valorem Tax | no attested term | 从价税 (cóngjià shuì) | 종가세 (jonggase) | An indirect tax charged as a percentage of the price, such as GST. It pivots the supply curve upwards, so the tax per unit grows as the price rises. |
| Subsidy | pūtea āwhina | 补贴 (bǔtiē) | 보조금 (bojogeum) | A payment by government to a producer or consumer, used here to encourage the output of goods with positive externalities. |
| Consumer Surplus | no attested term | 消费者剩余 (xiāofèizhě shèngyú) | 소비자잉여 (sobija ingyeo) | The difference between what consumers are willing to pay for a good and what they actually pay. |
| Producer Surplus | no attested term | 生产者剩余 (shēngchǎnzhě shèngyú) | 생산자잉여 (saengsanja ingyeo) | The difference between the price producers receive for a good and the minimum price they would be willing to accept. |
