Alex Tabarrok (reference below) uses the term bystanders (or bystander’s or bystanders’) surplus to be the equivalent of Consumer Surplus and Producer Surplus as it applies to everyone else affected by an action.
Social Surplus = Consumer Surplus + Producer Surplus + Bystanders Surplus
Tabarrok notes that when there are significant bystanders’ (external) costs or benefits the market will not maximize social surplus.
Atlas topic, subject, and course
Alex Tabarrok, minute 5:56 of An Introduction to Externalities (12-minute video), Principles of Economics – Microeconomics, Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-microeconomics/externalities-definition-pigovian-tax, accessed 6 May 2016.
Page created by: Ian Clark, last modified 6 May 2016.