Real capital goods, in this instance, refers to social capital, which is the sum total of capital stock possessed by an economy as a whole.
The term social benefits may be used in two ways (Levy, pp. 284-349). First, social benefits may be considered to be all of the gains in welfare which are derived from a specific economic decision. Alternatively, social benefits may be viewed in a more narrow context as being only those benefits accruing to those in a society other than the decision-maker(s). In this alternative approach, social benefits are contrasted to private benefits. Social benefits, in this alternative context, are viewed as externalities, or spill-over effect. The location of a public housing project in an affluent neighborhood likely would be perceived by the residents of such a neighborhood as a negative externality.
The term social costs refers to the total costs borne by society as a whole as a result of a specific economic decision (Levy, pp. 284-349). Thus, social costs consist of the opportunity costs associated with resources used, the value of any loss in welfare associated with a specific economic decision, and any increase in costs for those in society other than the decision-maker, which results from a specific economic decision. The concept of social costs is closely related to the concept of externalities. The social costs associated with a specific economic decision differ, in theory, from the private costs associated with such a decision by the amount of the value of any external economies or diseconomies associated with the economic decision.
In lay language, externalities may be described as side-effects and fringe-benefits (Levy, pp. 145-269). Positive externalities may be viewed as fringe-benefits, while negative externalities may be viewed as side-effects. Externalities are also referred to as spillover effects, external effects, and social effects. All such terms refer, essen...
The Location of Public Housing Projects. (1969, December 31). In LotsofEssays.com. Retrieved 22:25, November 22, 2014, from http://www.collegetermpapers.com/viewpaper/1303344875.html