CAS EC 101 Lecture Notes - Lecture 18: Sports Game, Grand Banks Of Newfoundland, Opportunity Cost
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CAS EC 101 Full Course Notes
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No, because rents guide inputs to the producer that values them the most. Example: best soccer player gets paid most by the team that allows him to entertain the most people. Some goods and services cannot be efficiently provided in private markets. Law enforcement (need gov"t authorities to do this well) Clean streets (gov"t hires firms to clean streets, hard to do without gov"t involvement) A good or service is nonexcludable if it is very difficult or costly to prevent people from enjoying its benefits. If the streets are cleaned, there is no reasonable way to deprive people of those benefits. Anyone can see the clean streets and feel good about it. The owner of the movie theater controls whether or not customers can enter. Fire department was told they need to do the service now whether or not someone pays after this. Cost of exclusion: value of the house.