Economics 1021A/B Chapter Notes - Chapter 17: Public Good, Marginal Utility, Private Good

• School: Western University
• Department: Economics
• Course: Economics 1021A/B
• Professor: Emilie Rivers

Document Summary

Chapter 17: public goods and. Private goods food and drink car: house. Common resources fish in ocean: atmosphere city parks. Public goods itunes song cable tv: bridge/tunnel. Excludable: national defense, weather forecasting law. Free- rider problem: marker would provide inefficiently small quantity of public good: msb > msc with dwl occurring. Marginal social benefit from public good: person"s marginal benefit from public good as qty. Efficient quantity of public goods. If msb > msc resources can be used more efficiently by qty. (extra benefit > extra cost) If msb < msc resources can be used more efficiently by qty. (extra cost > extra benefit) Efficient public provision: gov"t can tax all consumers of public good and force everyone to pay, overcomes free- rider problem. Sustainable use of renewable resource: renewable natural resource: replenishes itself by birth and growth of new members of population. Sustainable use to maximum: maximize sustainable use from balancing births and availability of food to sustain population.