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Unformatted text preview: [email protected] Environmental and Natural Resource Economics Exam 1 Study Guide F OUR T YPES OF G OODS Private: Rival and Excludable. Can be prevented from usage Ex. Sandwich Common Resource: Rival and Non-Excludable. Ex. Park, Road Problems with Common Goods Limited amount: common resources will be used more than what is socially desired Public: Non-Rival and Non-Excludable. One person’s use cannot diminish another’s Ex. National Defense, lighthouse Problems with Public Goods Free Rider: person who receives a benefit, but dose not pay for it Natural Monopoly: Non-rival and Excludable. One person’s use can diminish another’s Ex. Cable TV Non-excludable and Non-Rival goods M ARKET F AIL URE 6 T YPES OF M ARKET F AILURES 1. Market Power Monopolies create a deadweight loss inefficient Gov.’t can improve market outcome by -Regulat ing-Enforcing Ant i-t rust laws-Public ownership (i.e. post office, Am t rak) 2. Externalit ies When one’s action in a market impacts the welfare of a bystander Pollut ion inefficient levels of production lower social welfare...
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- Spring '09
- Economics, Supply Cu rve, ICAT ION, bystander Pollut ion, different informat ion