November 3rd- Lecture

November 3rd- Lecture - November 3rd - mid terms covers...

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November 3rd - mid terms covers transport, (3 transport readings + lectures of module 3 - office hours, 430-530 burnside 432 (Millard Ball) Marginal benefits and costs from ecosystem services: As marginal costs increases, Marginal benefits goes down, as you increase cleaning the air it increases in price - eco system services has no prices, no point where mc=mb - if you ask how much ppl are willing to pay for envro improvement, techniques are designed to illicit marginal benefit - welfare game (figure from costanza) Mb is large and the mc is small, the difference between each unit is the total welfare game - if there is nutrient cycling in the arctic, then there is no price associated with the service and the price is cut off (consumer surplus and net rent is total welfare) - U(Q+ delta Q, Y-delta Y) = U(Q,Y) ----> U is utility - if we increase change the environmental quality, in order to leave with the same utility they had before, we have to decrease their wealth Why externatlities cause us to over consume: MB is going down while MC is going up: x- quanitity of gasoline y- price MCis the private price of driving MC shifts to the left because of externatlities (not paid directly), thus theres is a welfare
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November 3rd- Lecture - November 3rd - mid terms covers...

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