Economics 1021A/B Chapter Notes - Chapter 16: Arthur Cecil Pigou, Coase Theorem, Ecotax

• School: Western University
• Department: Economics
• Course: Economics 1021A/B
• Professor: Michael Parkin

Document Summary

Congestion costs of congestion are time costs and fuel costs drivers spend extra hours sitting in stalled traffic, burning additional fuel. Pollution and carbon emission economic activity pollutes air, water and land these individual areas of pollution interact through the ecosystem. 60% of our air pollution comes from road transportation and industrial processes. Positive production externalities a honey farmer places beehives beside an orange grower"s orchard. Positive consumption externalities flu vaccination generates positive consumption externalities education, restoring historic building. Valuing an external cost economists use market prices to put a dollar value on the cost of production. Coase solution is not available with externalities offer no easy solution transactions costs that block a market solution are real costs, so attempts by government to deal unregulated market overproduces and creates a deadweight loss. Government actions in the face of external costs.