ECON101 Lecture Notes - Lecture 1: Government Failure, Market Failure, Public Choice

• School: University of Waterloo
• Department: Economics
• Course: ECON101
• Professor: Zara Liaqat

Document Summary

Chapter 17 public goods and common resources. If it is possible to prevent someone from enjoying its benefits: must pay to consume them. Nonexcludeable: impossible to prevent anyone from benefiting from it: when a police cruiser enforces the speed limit everyone on the highway benefits if one person"s use of it decreases the quantity available for someone else. Cant deliver at the: nonrival: if one person"s use of it does not decrease the quantity available for someone else, ex. Police services are nonrival as one persons benefit does not lower someone elses benefit same time. Natural monopoly good: marginal cost is zero, the fixed cost of producing is usually high. So economies of scale exist over the entire range of output for which there is demand. Recall that economies of scale is the cost advantage that arises with increased output of product.