ECON 225 Study Guide - Midterm Guide: Externality, Rationality
12 May 2014
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Bad a particular good always decrease utility environmental services any services provided by the environment waste absorption, protection from uv existence services benefit derived from simply knowing that something exist, without any direct contact saving endangered species, protecting ancient monuments rival a good is rival if use by on person precludes consumption by anyone else excludable a goods is excludable if someone can be prevented from enjoying it goods are rival and excludable to varying degrees scarce goods a goods is scarce if at a price of zero demand exceeds supply. 3. public goods are characterized by under provision because of free riding require collective action to achieve efficiency cooperation yields a pareto improvement that the market cannot provide market led to under provision of the public goods public goods problems are addressed by government provision global public goods are much harder to provide collective action among country has to be voluntary.
