CAS EC 101 Lecture : EC101 Nov 22

• School: Boston University
• Department: Economics
• Course: CAS EC 101
• Professor: Neil Watson

Document Summary

Pigovian taxes and subsidies: negative production externality, marginal social cost (msc)= everywhere above the marginal price cost, positive production externality, marginal cost curve under social cost, negative consumption externality, positive consumption externality, private solutions to externalities, government action is not always needed to solve the problem of externalities, types of private solutions. Contracting between parties: the coase theorem is a proposition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own, transaction costs are the costs that parties incur in the process of agreeing to and following through on a bargain, public policies towards externalities, wen externalities are significant and private solutions are not found, government may attempt to solve the problem through .