lec12 - Everyone else limit catch-$ Conservation of fish +$...

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1. Public goods – market fails to operate a. Nonrival goods and services b. Nonexclusive goods and services c. Lack of defined property rights 2. Externalities – the market works – we object to the outcome a. Negative externalities – spill-over costs b. Positive externalities spill-over benefits c. Marginal social costs d. Marginal social benefits 3. Negative externalities – a cost to a third party not involved in the transaction 4. Positive externalities – benefit to third party(ies) not involved in the transaction I buy device I don’t buy device Everyone else buys a device Clean air (Free rider)clean air No one else buys a device Brown air Dirty air The only successful fixed subway system is before ww2. I limit my catch I don’t limit my catch
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Unformatted text preview: Everyone else limit catch-$ Conservation of fish +$ Conservation No one else limit their catch-$ No conservation of fish +$ No conservation When there are no property right, goods and services are overly consumed because you do not get the advantage of preserving the resource long term. Congestion 1000 cars x 20 min = 2000 minutes, as budding economist we can plead with people. 1. Flu shot high positive externality prevent others from catching the flu 2. Junk yard- negative externality the property gone down a. This is why we create zoning- 3. How should a county zoning emission decide to zone? Consider the extend of its positive or negative externality...
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This note was uploaded on 10/02/2011 for the course ECON 200 taught by Professor Cramer during the Spring '07 term at University of Arizona- Tucson.

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lec12 - Everyone else limit catch-$ Conservation of fish +$...

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