CVEN3701_EE16_LECTURE2.pdf - CVEN 3701 Environmental...

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CVEN 3701 Environmental Economics LECTURE 2 5-MAY-2016 1
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Content Environment and market failure - Misallocation of environmental resources What is market failure? - Markets and property rights - Public goods - Externalities 2
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Market Allocation of Environmental Resources Understand the conflicting goals of consumers and producers: Consumer to achieve the highest level of utility possible within budget lower prices allow consumers to buy more, thus expanding their utility Producer to maximise their profits but lower prices reduce profits 3
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