TAILIEUCHUNG - Lecture Principles of economics (Asia Global Edition) - Chapter 10

Chapter 9 - Externalities and Property. In chapter 9 we will investigate how the allocation of resources is affected when activities generate costs or benefits that accrue to people not directly involved in those activities. We will see that if parties cannot easily negotiate with one another, the selfserving actions of individuals will not lead to efficient outcomes. | Externalities and Property Rights Chapter 10 McGraw-Hill/Irwin Copyright © 2015 by McGraw-Hill Education (Asia). All rights reserved. 1 1 Learning Objectives Define negative and positive externalities and analyze their effect on resource allocations Discuss and explain the Coase Theorem Explain how the effects of externalities can be remedied and discuss why the optimal amount of an externality is almost never zero Illustrate the tragedy of the commons and show how private ownership is a way of preventing it Define positional externalities and their effects, and show how they can be remedied 2 External Costs and Benefits An external cost is a cost of an activity that falls on people other than those who pursue the activity Also called a negative externality An externality is the name given to an external cost or external benefit of an activity An external benefit is a benefit of an activity received by people other than those who pursue the activity Also called a positive externality 3 Externalities Affect Resource Allocation Externalities reduce economic efficiency Solutions to externalities may be efficient When efficient solutions to externalities are not possible, government intervention or other collective action may be used 4 Honeybee Keeper – Scenario 1 Phoebe harvests and sells honey from her bees Bees pollinate the apple orchards No payments made to Phoebe The bees provide a free service to the local farmers Phoebe is giving away a service Private costs are equal to private benefits Social costs are less than social benefits When external benefits exist, maximizing private profits produces less than the social optimum 5 Honeybee Keeper – Scenario 2 Phoebe harvests and sells honey from her bees People at a neighboring school and nursing home are bothered by bee stings The bees are a nuisance to the neighbors Phoebe is not paying all the costs of her honeybees Private costs are equal to private benefits Social costs are greater than social benefits When .

• Kinh tế học
• Principles of economics
• Lecture Principles of economics
• Market imperfections
• The international economy
• Property rights
• Coase Theorem
• Ten principles of economics
• People face tradeoffs
• Opportunity cost
• Marginal changes
• Economics of information
• Consumer choice
• Free rider problem
• Market transactions
• Welfare Economics
• Consumer surplus
• Demand curve
• Efficiency of markets
• Nature of an externality
• Market inefficiency
• Negative externalities
• 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