TAILIEUCHUNG - Lecture Principles of economics - Chapter 4: Externalities

In this chapter you will: Learn the nature of an externality, see why externalities can make market outcomes inefficient, examine how people can sometimes solve the problem of externalities on their own, consider why private solutions to externalities sometimes do not work, examine the various government policies aimed at solving the problem of externalities. | 4 THE ECONOMICS OF THE PUBLIC SECTOR 10 Externalities Recall: Adam Smith’s “invisible hand” of the marketplace leads self-interested buyers and sellers in a market to maximize the total benefit that society can derive from a market. But market failures can still happen. EXTERNALITIES AND MARKET INEFFICIENCY An externality refers to the uncompensated impact of one person’s actions on the well-being of a bystander. Externalities cause markets to be inefficient, and thus fail to maximize total surplus. EXTERNALITIES AND MARKET INEFFICIENCY An externality arises. . . . when a person engages in an activity that influences the well-being of a bystander and yet neither pays nor receives any compensation for that effect. EXTERNALITIES AND MARKET INEFFICIENCY When the impact on the bystander is adverse, the externality is called a negative externality. When the impact on the bystander is beneficial, the externality is called a positive externality. EXTERNALITIES AND MARKET INEFFICIENCY .

• Kinh tế học
• Principles of economics
• Lecture Principles of economics
• Nature of an externality
• Market inefficiency
• Welfare economics
• Negative externalities
• Ten principles of economics
• People face tradeoffs
• Opportunity cost
• Marginal changes
• Economics of information
• Consumer choice
• Free rider problem
• Market transactions
• Consumer surplus
• Demand curve
• Efficiency of markets
• Principles of microeconomics
• Lecture Principles of microeconomics
• Scarce resources
• Scarcity implies choice
• Choice implies cost
• Principles of agricultural economics
• Agricultural economics
• Economics of agricultural production
• Theory of consumer behaviour
• Economics of market demand
• Dynamics in demand analysis
• Analysis of agricultural markets
• Agricultural markets
• Economics of trade
• Costs of taxation
• Deadweight loss
• Laffer curve
• Supply side economics
• Market forces
• Supply and demand
• Market economies
• Competitive Markets
• Thinking like an economist
• Economic models
• Circular flow diagram
• Production possibilities frontier
• The gains from trade
• Production possibilities
• Comparative advantage
• Absolute advantage
• Costs of production
• Total revenue
• Total cost
• Opportunity costs
• Price elasticity of demand
• Price elasticity
• Midpoint method
• Demand curves
• Factors of production
• Demand for labor
• Production function
• Marginal product of labor
• Controls on prices
• Price ceiling
• Price floor
• Market outcomes
• Theory of consumer choice
• Budget constraint
• Indifference curve
• Marginal rate of substitution
• Measuring nation’s income
• Economy’s income
• Gross domestic product
• Components of GDP
• International trade
• Determinants of trade
• Equilibrium without trade
• Production and growth
• Economic growth
• Monetary system
• Functions of money
• Federal reserve
• Central bank
• Open economy macroeconomics
• Economy macroeconomics
• Closed economy
• Open economy
• Public goods
• Common resource
• Types of goods
• Cost benefit analysis
• Aggregate demand
• Aggregate supply
• Short run economic fluctuations
• Economic fluctuations
• Tax system
• Federal Government
• Marginal tax rate
• Budget surplus
• Macroeconomic policy
• Debate over macroeconomic policy
• Stabilize the economy
• Monetary policy