LECTURE 4 Public Goods and Externalities

Jul 23, 2012

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SOME DEFINITIONS. PUBLIC GOODS are goods that can be jointly consumed by a number of consumers without reducing any one consumer's ability to enjoy that consumption.. EXTERNALITIES exist when consumption or production decisions made by one agent affect the utility or production attainable by ano

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LECTURE 4 Public Goods and Externalities

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Externalities and Public Goods

Externalities and Public Goods.

644 views • 40 slides

Externalities and Public Goods

Externalities and Public Goods. From free-riding to the Coase theorem. Externalities and Public Goods. Up until now we have made several implicit assumptions when analysing “agents” Agents are independent : their welfare depends only on their own consumption / production decisions

609 views • 27 slides

Chapter 3 section 3 Public Goods and Externalities

Chapter 3 section 3 Public Goods and Externalities. Private goods- 2 features The amount consumed by one person is unavailable to others Nonpayers can easily be excluded. Public goods. National defense, the Centers for Disease Control, mosquito-control program, it is non-rival.

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Lecture 9: Externalities and Public goods

Lecture 9: Externalities and Public goods. Charit Tingsabadh M.Sc. Programme in Environmental and natural resource economics Semester 1/2005. outline. Concepts Specification Empirics. concept. Externality: By-products of consumptions and production may benefit or harm other people

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Externalities and Public Goods

Chapter 17. Externalities and Public Goods. Chapter Seventeen Overview. Motivation Inefficiency of Competition with Externalities Allocation Property Rights to Restore Optimality The Coase Theorem Problems with the Coase Approach Other Methods to Restore Optimality – Standards and Fees

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Externalities Public and Private goods

Externalities Public and Private goods. ♦ Explain how public goods differ from private goods and why private markets fail to provide public goods. ♦ Classify goods and services on the basis of rivalry and excludability. Nonrival.

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Chapter 5- Market Failures: Public Goods and Externalities

October 9, 2013. Chapter 5- Market Failures: Public Goods and Externalities. No Ch.5 or Ch.6 Quiz this unit  Today: Market Failures Tomorrow: Public/Private Goods Friday: Externalities HW: Ch. 5 Questions #1-3 and Problems #1-3. McGraw-Hill/Irwin. Market Failures.

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Chapter 15 Public goods, externalities & market failure

Chapter 15 Public goods, externalities & market failure. Selected sections of chapter 15. Private goods. 2 characteristics Rivalry in consumption – when one person buys and consumes a good, it is not available to others .

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Public Goods & Externalities

Public Goods & Externalities. What are Public Goods?. Public goods are jointly consumed goods. If one person gets the good, everyone gets it. One person’s consumption of the good does not reduce the amount available for others to consume. (The good is “nonrival in consumption.”)

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Market failure: Externalities & Public goods

Market failure: Externalities & Public goods. Part I: Externalities. Price. Competitive markets achieve Allocative efficiency (maximum satisfaction) when the highest price the consumer is willing to pay = the cost of producing the next unit of the good ( P = MB = MC )...

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Externalities, Commons and Public Goods

Externalities, Commons and Public Goods. Perloff Chapter 18. Externalities. When a person’s well being or a firm’s production capacity is affected directly by another’s actions. Negative Chemical plant dumping waste into a lake. Positive

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Public Goods and Externalities

Public Goods and Externalities. Public goods and externalities: two more “market failures”. another market failure (discussed in the previous lecture) is due to “monopoly power”

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Externalities, Environmental Policy, and Public Goods

5. Externalities, Environmental Policy, and Public Goods. CHAPTER. Can Government Policies Help Protect the Environment?. Government policies to reduce pollution have proven to be controversial. Command and control — Can be costly and inefficient

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Chapter 17 Externalities and Public Goods

Chapter 17 Externalities and Public Goods. 17.1 Introduction 17.2 Externalities 17.3 Public Goods. 17.1 Introduction. First Fundamental Theorem of Welfare Economics: IF All consumers and producers act as perfect competitors (no one has market power) and

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Externalities, Environmental Policy, and Public Goods

Externalities, Environmental Policy, and Public Goods. Externalities and Efficiency. 1. LEARNING OBJECTIVE. Externality A benefit or cost that affects someone who is not directly involved in the production or consumption of a good or service. The Effect of Externalities

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Public goods and externalities: examples and exercises

Public goods and externalities: examples and exercises. Lecture 12 – academic year 2014/15 Introduction to Economics Fabio Landini. Example of the bridge: two-ways table. Tax. Yes. No. Many. N. persons. Few. INTRO. The book says that both public good entail externalities .

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Externalities, Public Goods, Imperfect Information, and Social Choice

Externalities, Public Goods, Imperfect Information, and Social Choice. Market Failure. Market failure occurs when resources are misallocated or allocated inefficiently. Externalities and Environmental Economics.

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Market Inefficiencies: Externalities and Public Goods

7. Market Inefficiencies: Externalities and Public Goods. Midterm Exam. Maximum score: 80, 88.89 % Average score: 60.6, 67.35 % 80% and above: 7 70%-80%: 5 60%-70%: 20 Below 60%: 2. Previously.

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Market Failures: Public Goods and Externalities

Market Failures: Public Goods and Externalities. 4. Market Failures. Market fails to produce the right amount of the product Resources may be Overallocated Underallocated. LO1. Demand-Side Failures. Impossible to charge consumers what they are willing to pay for the product

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CHAPTER 19-20 Externalities And Public Goods CHAPTER 21

CHAPTER 19-20 Externalities And Public Goods CHAPTER 21 Taxes, Social Insurance, and Income Distribution. Step 1. 8-page packet (Section 5) is essential – Be sure to read to get basic definitions & concepts. This is the simplified version of Chapters 19 & 20.

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Market Inefficiencies: Externalities and Public Goods

7. Market Inefficiencies: Externalities and Public Goods. Market Failure. Market Failure When the free market may not provide economically efficient (ideal) outcome Sources Too little competition Monopoly/Cartels Too little output/total surplus (deadweight loss)

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Market Inefficiencies: Externalities and Public Goods

10. Market Inefficiencies: Externalities and Public Goods. Previously. Consumer surplus is the difference between what a consumer is willing to pay and the price actually paid for a good or service.

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LECTURE 4 Public Goods and Externalities

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Presentation Transcript

Externalities and Public Goods

Externalities and Public Goods

Chapter 3 section 3 Public Goods and Externalities

Lecture 9: Externalities and Public goods

Externalities and Public Goods

Externalities Public and Private goods

Chapter 5- Market Failures: Public Goods and Externalities

Chapter 15 Public goods, externalities &amp; market failure

Public Goods &amp; Externalities

Market failure: Externalities &amp; Public goods

Externalities, Commons and Public Goods

Public Goods and Externalities

Externalities, Environmental Policy, and Public Goods

Chapter 17 Externalities and Public Goods

Externalities, Environmental Policy, and Public Goods

Public goods and externalities: examples and exercises

Externalities, Public Goods, Imperfect Information, and Social Choice

Market Inefficiencies: Externalities and Public Goods

Market Failures: Public Goods and Externalities

CHAPTER 19-20 Externalities And Public Goods CHAPTER 21

Market Inefficiencies: Externalities and Public Goods

Market Inefficiencies: Externalities and Public Goods

Chapter 15 Public goods, externalities & market failure

Public Goods & Externalities

Market failure: Externalities & Public goods