For example, if the set point is 68ÂºF and the swing is 2Âº, the thermostat won't call for heat until the temperature reaches 66ÂºF, then it will heat until 68ÂºF and turn off. More degrees of swing is better for the efficiency.
Supply shock. A supply shock is an event that suddenly changes the price of a commodity or service. It may be caused by a sudden increase or decrease in the supply of a particular good. This sudden change affects the equilibrium price. A negative supply shock will raise prices and shift the aggregate supply curve to the left. A negative supply shock can cause stagflation due to a combination of raising prices and falling output. A positive supply shock will lower the price of said good and shift the aggregate supply curve to the right. A positive supply shock could be an advance in technology which makes production more efficient, thus increasing output.
1) Negative Production Externality-when a firm's production reduces the well-being of others who are not compensated by the firm. Examples: 2) Negative consumption externality-when an individual's consumption reduces the well-being of others who are not compensated by the individual. Example: The government can use the pigouvian tax to reduce consumption of a specific good or service.