ECO 2118 Study Guide - Municipal Solid Waste, Plains Bison, Natural Capital
Document Summary
January 11, 2013: cost of a litre of gasoline. What is the cost of a litre of gasoline: factors to consider. Accidents (risk)/insurance costs: crash incompatibility (anderson and auffhammer (2012) external cost equals sh. 27/litre) Actual calculation of the total costs is very complex. Key point: some of the costs of one"s decision to drive are borne by the individual making the decision to drive; others are borne by others (i. e. , they are external to the individual decision-maker). A more recent study estimated the social cost of a gallon of gasoline at . 60 (low) to. This implies the price should be between . 60-. 14/gallon. Economics is the study of: the allocation of scarce resources, decision-making by individuals, firms, governments and other organizations such as families, ngos, etc. The role of constraints on decision-making are particularly important: role of information and policy in decision-making and resource allocation, how incentives influence behaviour.
