ECON-E 201 Lecture Notes - Lecture 17: Overgrazing, Excludability, Externality

44 views2 pages
Verified Note
School
Department
Professor

Document Summary

Si(cid:511)(cid:457)e private goods are e(cid:928)(cid:457)luda(cid:456)le, there is a(cid:511) i(cid:511)(cid:457)e(cid:511)ti(cid:922)e to pa(cid:929) (cid:479)or a(cid:511)d thus to produ(cid:457)e the(cid:510) Pri(cid:922)ate (cid:480)oods (cid:457)a(cid:511) there(cid:479)ore (cid:456)e pro(cid:922)ided (cid:456)(cid:929) the (cid:510)arket. The o(cid:511)l(cid:929) people (cid:923)ho (cid:923)ill (cid:456)e e(cid:928)(cid:457)luded (cid:479)ro(cid:510) (cid:457)o(cid:511)su(cid:510)i(cid:511)(cid:480) a pri(cid:922)ate (cid:480)ood are the people (cid:923)ho are (cid:511)ot (cid:923)illi(cid:511)(cid:480) or a(cid:456)le to pa(cid:929) (cid:923)hat it (cid:457)osts to produ(cid:457)e it. Si(cid:511)(cid:457)e pu(cid:456)li(cid:457) goods are (cid:511)o(cid:511)e(cid:928)(cid:457)luda(cid:456)le, it"s di(cid:479)(cid:479)i(cid:457)ult to (cid:480)et people to pa(cid:929) (cid:479)or the(cid:510) (cid:922)olu(cid:511)taril(cid:929) Markets (cid:923)ill te(cid:511)d to u(cid:511)der pro(cid:922)ide pu(cid:456)li(cid:457) (cid:480)oods. Pu(cid:456)li(cid:457) (cid:480)oods are also (cid:511)o(cid:511)ri(cid:922)al, (cid:923)hi(cid:457)h (cid:510)ea(cid:511)s that o(cid:511)e perso(cid:511)"s use does(cid:511)"t redu(cid:457)e the a(cid:456)ilit(cid:929) o(cid:479) a(cid:511)other perso(cid:511) to use the (cid:480)ood. 7 (cid:456)illio(cid:511) people (cid:457)a(cid:511) (cid:456)e prote(cid:457)ted (cid:479)ro(cid:510) a(cid:511) asteroid (cid:479)or the sa(cid:510)e (cid:457)ost as prote(cid:457)ti(cid:511)(cid:480) (cid:2226) (cid:510)illio(cid:511) people. Be(cid:457)ause pu(cid:456)li(cid:457) (cid:480)oods are (cid:511)o(cid:511)e(cid:928)(cid:457)luda(cid:456)le, so(cid:510)e people (cid:923)ill free ride. I(cid:479) people (cid:479)ree ride, the (cid:480)ood (cid:923)ill (cid:456)e u(cid:511)derpro(cid:922)ided (cid:456)(cid:929) the (cid:510)arket. B(cid:929) ta(cid:928)i(cid:511)(cid:480) e(cid:922)er(cid:929)o(cid:511)e to pa(cid:929) (cid:479)or the pu(cid:456)li(cid:457) (cid:480)ood, (cid:480)o(cid:922)er(cid:511)(cid:510)e(cid:511)t (cid:457)a(cid:511) (cid:510)ake people (cid:456)etter o(cid:479)(cid:479)

Get access

Grade+20% off
$8 USD/m$10 USD/m
Billed $96 USD annually
Grade+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
40 Verified Answers
Class+
$8 USD/m
Billed $96 USD annually
Class+
Homework Help
Study Guides
Textbook Solutions
Class Notes
Textbook Notes
Booster Class
30 Verified Answers

Related Documents