PSCI231 Lecture Notes - Lecture 3: Street Light, Staples Thesis, Externality

• School: University of Waterloo
• Department: Political Science
• Course: PSCI231
• Professor: Heather Whiteside

Document Summary

Staples thesis: a staple- based economy relies on the export of unprocessed or relatively unprocessed resources. This serves as the leading sector of the economy and sets the pace for growth. The point of the staple reliant is that you are exporting and bring in national income. Public goods: non-rival and non-excludable (e. g. , the light given off by the street lamp, fresh air: over time public goods can become private goods, ex. In polluted places, people may be willing to pay for fresh air: one persons benefit doesn"t hinder another person. Externalities, social costs: costs are not borne by the entity that produces them (eg. , pollution, dumping) Perverse results/adverse selection: (e. g. , private health insurance: the market process leads to a sociably undesirable outcome ex. Can be negative and positive: the most common time of firm is the corporation (87, corporation is good because no one person or owner is liable, it is a separate legal entity.