The benefits received by those directly consuming or producing a product are called

• A. Private Benefits
• B. Social Benefits
• C. External Benefits
• D. Public Benefits

Answer: (A)

Private benefits are the gains enjoyed directly by the person or firm involved in consuming or producing a good. For example, your own satisfaction from a purchase or the profits a firm earns from selling a product are private benefits. Social benefits would include these private gains plus extra advantages that affect others (positive spillovers), while external benefits refer to those spillovers on third parties. Public benefits isn’t the standard label for this context. So the benefits received directly by those involved are best described as private benefits.