LESON10A

LESON10A - Econ 275 - Public Finance - Fall 1992 - 10/6/92...

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Econ 275 - Public Finance - Fall 1992 - 10/6/92 - Lesson #10 - leson10a.275-- Page -- Admin: Hand back tests and papers Write up breakdowns on test Thursday will allow last 10 minutes for group coordination. Write up externalities outline Ch 8 (Externalities) Definition Positive and Negative Consumption and Production Write up a 2x2 box with pos/neg on one axis and cons prod on the other. Get examples of each box: for example what are positive production externalities. Positive Production: Honey-bee and apple orchard. Negative Production: pollution, over use of scarce resources Positive Consumption: Consumption of Scope or Listerine Negative Consumption: Cigarette smoking, loud music playing at 3 am, riding garbage cans down the street.(story with the Mace's). Consequences These occur due to the divergence of private costs (and benefits) and public costs (and benefits). Efficiency requires all costs and benefits to be considered. Draw graph illustrating production externality.
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LESON10A - Econ 275 - Public Finance - Fall 1992 - 10/6/92...

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