This preview has intentionally blurred sections. Sign up to view the full version.View Full Document
Unformatted text preview: EEP 101/Econ 125 Section 5 Diana Lee Spring 2010 1 Short answer 1. True or false: Demand curves for public goods are decreasing because people enjoy them less when more is provided. 2. What are the 3 assumptions and 3 conclusions of the Coase theorem? 3. The Coase theorem is (more/less) likely to hold when there are very few actors involved. 4. Under a quota on production, producers (gain/lose/ambiguous). 5. Name one benefit and one drawback of using voluntary agreements to correct market externalities. 2 Public Goods: Big picture Nature of goods: Excludable ( can prevent usage ) Non-excludable Rivalrous Private Goods Common Goods ice cream public toilet Non-rivalrous Club Goods Public Goods ( can be simultaneously used ) Tickets to a show, gym membership Public park • Key feature of nonrivalrous goods: vertical summation (rather than horizontal) of demand. • Key issue with public goods is how to finance them: taxes (income, property, sales), donations, or by using sales on private good element (selling naming rights, membership benefits, tax incentives, etc.) to subsidize the public good....
View Full Document
This note was uploaded on 09/24/2011 for the course ECON C125 taught by Professor Zelberman during the Spring '09 term at Berkeley.
- Spring '09
- Public Good