TAILIEUCHUNG - Lecture Principles of microeconomics - Chapter 11: Externalities and property rights

This chapter introduces you to the third party effect of external costs and external benefits. You will learn that externalities cause an inefficient allocation of resources, but with negotiation between the affected parties solutions can be devised to correct the misallocation. | Externalities and Property Rights Slide 11 - What is Chapter 11 about? Slide 11 - I. External Costs and Benefits Slide 11 - Externalities External cost A cost that falls on people other than those who pursue the activity Aka negative externality External benefit A benefit received by people other than those who pursue the activity Aka positive externality Note: an externality is an impact on others which is NOT reflected in prices Slide 11 - Externalities and the Invisible Hand The ‘invisible hand’ model assumes conditions of perfect competition where externalities do not exist With externalities present: Free markets cannot necessarily be expected to produce socially efficient outcome Example: Bee-keeper and orchards Slide 11 - Externalities and Resource Allocation Individuals considering only their own costs and benefits will tend to engage Too much in activities that generate Negative externalities Market Price will overestimate benefit of activity Too little

• Kinh tế học
• Principles of microeconomics
• Lecture Principles of microeconomics
• Market imperfections
• Labour markets
• External costs
• External benefit
• Ten principles of economics
• Scarce resources
• Scarcity implies choice
• Choice implies cost
• Thinking like an economist
• Economic models
• Circular flow diagram
• Production possibilities frontier
• The gains from trade
• Production possibilities
• Comparative advantage
• Absolute advantage
• Market forces
• Supply and demand
• Market economies
• Competitive markets
• Price elasticity of demand
• Price elasticity
• Midpoint method
• Demand curves
• Controls on prices
• Price ceiling
• Price floor
• Market outcomes
• Market failures
• Negative externalities
• Positive externalities
• Market inefficiency
• Public goods
• Common resources
• Types of goods
• Cost benefit analysis
• Tax system
• Federal government
• Marginal tax rate
• Budget surplus
• Costs of production
• Total revenue
• Total cost
• Opportunity costs
• Firms in competitive markets
• Average revenue
• Marginal revenue
• Sunk costs
• Monopoly resources
• Government created monopolies
• Natural monopolies
• Monopoly’s revenue
• Monopolistic competition
• Nash equilibrium
• Equilibrium for oligopoly
• Game theory
• Long run equilibrium
• Perfect competition
• Production possibility frontier
• Opportunity cost
• Rational people
• Indirect effects
• Law of demand
• Factors change demand
• Law of supply
• Market demand
• Demand intersect
• Demand determine prices
• Change in demand
• Change in supply
• Elastic demand curve
• Policy analysis with supply
• Policy analysis with demand
• Wealth creation
• Production cost
• Total surplus
• International trade
• Additional benefits of trade
• Average costs
• Break even price
• Increasing marginal costs
• Long run analysis
• Firms profit graphically
• Accounting profit
• Market effectiveness
• Monopolist pricing
• Price discrimination
• Antitrust laws
• Disruptive innovation in oligopolies
• Predatory pricing