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Lecture Economics of social issues - Chapter 4: Pollution problems: Must we foul our own nests?

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The environment provides services that are used by both household units and production units of the economy. In the processes of consumption and production, wastes are generated. If the ecological system cannot recycle these wastes as fast as they are generated, wastes accumulate. This constitutes pollution. | Chapter 4 Pollution Problems: Must We Foul Our Own Nests? Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 4- What Is Pollution? The Environment and Its Services Exhaustible resources Replaceable resources Waste disposal Recycling Wastes and the Concept of Pollution Pollution occurs when recycling processes fail to prevent wastes from accumulating in the environment 4- Common Forms of Pollution Air Pollution Carbon monoxide Sulfur dioxides Nitrogen oxides Hydrocarbons Particulates Water pollution Level of dissolved oxygen Materials and matter Land pollution Dumping of wastes Tearing up Earth’s surface 4- Demand and Marginal Private Benefit 1 2 3 4 5 6 2 4 6 8 10 12 $ Quantity of pizza D = MPB 14 The demand curve is a marginal private benefit curve Click 1: Callout flies in from right waits at top left of demand curve for 3 seconds and then slowly traces the demand curve down to the lower right Click 2: Callout flies out to bottom Click 3: Grid lines for 12 and 1 Click 4: Grid lines for 10 and 2 Click 5: Grid lines for 8 and 3 Click 6: Grid lines for 6 and 4 Click 7: Grid lines for 4 and 5 Click 8: Grid lines for 2 and 6 4- Externality in Consumption 1 2 3 4 5 6 2 4 6 8 10 12 $ HIV vaccine MPB MSB 14 MSB = MPB ± Externality Click 1: MSB = MPB +/- Externality Click 2: MPB curve Click 3: All orange grid lines 4- Supply and Marginal Private Cost 1 2 3 4 5 6 5 6 7 8 9 10 $ Quantity of pizza 11 S = MPC Click 1: S=MPC curve Click 2: grids for 5,1 Click 3: grids for 6,2 Click 4: grids for 7,3 Click 5: grids for 8,4 Click 6: grids for 9,5 Click 7: grids for 10, 6 4- Externality in Production 1 2 3 4 5 6 5 6 7 8 9 10 $ Quantity of pizza 11 MSC MSC = MPC ± Externality S = MPC Click 1: MSC = MPC +/- Externality Click 2: MSC curve Click 3: orange grids 4- Market Equilibrium without Externalities 1 2 3 4 5 6 2 4 6 8 10 12 $ Quantity of pizza D = MPB 14 S = MPC 3.5 7 4- Why . | Chapter 4 Pollution Problems: Must We Foul Our Own Nests? Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 4- What Is Pollution? The Environment and Its Services Exhaustible resources Replaceable resources Waste disposal Recycling Wastes and the Concept of Pollution Pollution occurs when recycling processes fail to prevent wastes from accumulating in the environment 4- Common Forms of Pollution Air Pollution Carbon monoxide Sulfur dioxides Nitrogen oxides Hydrocarbons Particulates Water pollution Level of dissolved oxygen Materials and matter Land pollution Dumping of wastes Tearing up Earth’s surface 4- Demand and Marginal Private Benefit 1 2 3 4 5 6 2 4 6 8 10 12 $ Quantity of pizza D = MPB 14 The demand curve is a marginal private benefit curve Click 1: Callout flies in from right waits at top left of demand curve for 3 seconds and then slowly traces the demand curve down to the lower right Click 2: Callout flies .

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