ECO-Cha 08

ECO-Cha 08 - Correct for negative externality: Pollution...

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8.1 Externality: A benefit or cost from consumption or production that spills over onto those who are not consuming or producing the good; Positive externality: Occurs when benefits spill over to an outside party who is not involved in producing or consuming the good; Negative externality: Occurs when costs spill over to an outside party who is not involved in producing or consuming the good (air pollution)
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Unformatted text preview: Correct for negative externality: Pollution taxes Regulation Correct for positive externality: Subsidies; Regulation; 8.2 Public good: It is another source of market failure; A good that is nonrivalrous in consumption and nonexcludable; Private goods: A good with rivalrous consumption and excludability...
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This note was uploaded on 02/10/2011 for the course ECO 2251 taught by Professor Kirkland during the Spring '09 term at Troy.

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