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Unformatted text preview: IB Economics – Drogaris Gaith Kalai Market Failure II Page 169;2,3,4+ P.172; 2 2. Since the industrial revolution, where the economy become largely industrialized in modern nations, a number of otherwise free goods were taken for granted; chiefly things like clean air and water, more technically referred to as open access resources. Caught in a profit-maximizing frenzy, firms are continuously exploiting this lack of property rights over otherwise free goods by polluting them and degenerating their nature. Therefore, lobbying groups are pushing governments to “put a price tag” on things like clean air, river water, ect… as to give producers incentive to keep them clean, because once they are forced to own something, they will do their best to pollute it minimally, just as they do their best to profit maximize. 3. As the world is moving into a phase where it is becoming more socially, politically and economically popular to the minimize damage being done to the environment, certain measures on an international scale have to be taken to ensure that the worldwide environmental measures are being enforced in order to...
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This document was uploaded on 10/26/2011 for the course PLIR 2050 at UVA.
- Fall '11