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Unformatted text preview: AEM 451 / Econ 409, Spring 2008 Lecture topics through February 28 1/22 Review of principles of microeconomics *Definitions of environmental, resource, and ecological economics Fundamental fields of economics upon which environmental economics draws Characteristics of public goods 1/24 Research presentation: Public goods, market power, and environmental regulation in the electric power sector (We will not test you on material from this presentation unless it also appears elsewhere in the course.) 1/29 Utilitarianism/social welfare function Paretian ethics *Pareto preferred Potential Pareto improvement *The compensation principle [Compensation principle exercise with money] *Pareto optimality/efficiency 1/31 *Circumstances for a system of free markets to lead to an efficient allocation of resources [Consumer surplus/producer surplus/pricing mechanism/demand measurement exercise] Consumer surplus, producer surplus The efficiency/Pareto optimality of allocating by means of a price mechanism such as our Diet Coke pricing mechanism Government revenue *Total surplus Deadweight loss 2/5 Effect of tax on social surplus when allocation was efficient before tax Relationship between social surplus and compensation principle Social surplus is like a social welfare function *The social welfare assumptions behind using social surplus comparisons Example of uniform-price auction (for textbooks) 2/7 When is the first-order condition in a single-variable optimization problem necessary and...
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- Spring '08