Lecture 4. Chapter 4
|
|
- Junior Carr
- 7 years ago
- Views:
Transcription
1 Lecture 4 Chapter 4
2 Public Goods What we are going to do Definitions Examples Rivalry If someone consumes a good, then no one else can Excludability If you don t pay, you don t get the good. Private Goods: Goods that are rival and Excludable Result in no Externalities
3 Public Goods Public Good you can t stop people from consuming it (nonexcludeable) Your consumption doesn t affect other s consumption (nonrivalrous) Public goods are associated with externalities because no one has a property right to a public good. Public goods lead to free riding Benefiting from a good without paying for it.
4 Public Goods Examples of Rivalry Is Satellite TV rivalrous? No, it is nonrivalrous Is it Satellite TV exludable? Yes, they can turn off your service Is it a public good then? No, a good has to be both nonrivalrous and nonexcludable.
5 Public Goods Example of Excludability Is fishing international waters excludable? No, who is going to enforce? Think Whale Wars Is it rivalrous? Yes, there are only so many fish in the ocean? Is it a public good? No, because it is rivalrous
6 Public Good Examples National Defense Rivalrous? Excludable? No. It is a public good because it is nonrivalrous and nonexcludable Fireworks show Rivalrous? Excludable? No, it is a public good because it is nonrivalrous and nonexcludable
7 Public vs. Private Bread Purely Private Total consumed = sum of individual consumption A market could form and people could adjust their consumption according to their preferences Heat Purely Public Everyone feels the same temp Impossible for one to consume more heat and exclude the others Individuals will not be able to adjust according to their preferences Everyone Consumes the same amount
8 If Ice a cream good is is both rival, also rival excludable, because and excludable, my Some Cable It is excludable, TV goods is non-rival, are since impure the because cable public my Table it consumption because is a 1 private I can good. of simply it precludes not share you goods consumption company my from because can of simply they it in no are refuse way non-rival, to hook consuming ice Other For Yet cream it example, is goods non-excludable with the are a you. same crowded impure ice because sidewalk cream. public but diminishes up Finally, National It is it The they also is system. pure are non-excludable, defense your (to public some consumption. is goods a classic extent) because are both only goods rival clearly way because very for difficult your they to enjoyment consume to are prohibit rival, it is but excludable. non-rival example. once is to not an area and It is non-excludable. is non-rival protected, because everyone my make excludable. reduced pedestrians more as more ice from cream. using pedestrians the sidewalk. also consumption consumes that of national protection. defense use the same sidewalk. protection does not diminish your consumption of it. Is the good excludable? Defining pure and impure public goods Is the good rival in consumption? Yes No Yes Ice cream Cable tv No Crowded city sidewalk National defense
9 Don t confuse distribution with production Think of the marginal cost of allowing an additional person watch a fireworks display. Marginal Cost of allowing additional consumers to consume a public good Once a public good has been provided, what is the additional cost of allowing an additional person to enjoy the good?
10 Marginal Cost of Producing A Public Good Let s think production: Does the fact that a good is public alter how much it costs to produce another unit of the good? Main Point: The marginal cost of producing a public good is positive for each unit (the constant marginal cost curve is for simplicity of explanation)
11 Good Classification Goods vary in their levels of excludability and Rivalry
12 Provision of Public and Private Goods What is the traditional way that we believe private goods are provided to consumers? Public Goods? What are examples of goods that are both provided privately and by the government? Tennis Courts, Education, Golf Courses
13 Congestible Public Goods Def: Goods for which crowding or congestion reduces the benefits to existing consumers when more consumers are accommodated Marginal cost of accommodating an additional consumer is not zero after the point of congestion is reached Example: a user of a congested road decreases the benefits to existing users by slowing traffic, increasing accident risk Other Examples?
14 Congestible Public Goods How do we graphically present a congestible public good?
15 Price-Excludable Public Goods Def: Goods with benefits that can be priced Can be individually consumed and are subject to exclusion, but their production and consumption is likely to generate externalities Membership rights to private clubs Schools, hospitals, transportation Is higher education a pure public good? Why Does the Government fund Higher Education then?
16 Annotated Bibliography Def: An annotated bibliography is a list of citations to books, articles, and documents. Each citation is followed by a brief (usually about 150 words) descriptive and evaluative paragraph, the annotation. The purpose of the annotation is to inform the reader of the relevance, accuracy, and quality of the sources cited. Alphabetical Order by last name of first author Citation Style Notes are what you need to write your paper At least six total references, two from peer reviewed journal articles Due Date: October 20 th Where to find peer reviewed journal articles?
17 Market Demand for a Purely Private good Think Horizontal Each Individual chooses how much they want at each price Demand for a purely Private good is the horizontal summation of the individual demand curves. Make sure demand is solved as Q a function of P, then add. For Example Q= 20 2P
18 Price of ice cream S=SMC $3 $2 D JERRY D BEN SMB =D BEN+JERRY 0 Q JERRY Q BEN Q TOTAL Notice MB Jerry = MB Ben = MSC Efficiency Quantity of ice cream
19 Demand for Pure Private Good Notice how the marginal conditions for efficiency are met: MB A = MB B = MB C = MC Also notice that these are prices per loaf
20 Demand for Pure Public Goods Think Vertical All consumers must consume the same quantity of the good Pure public goods cannot be divided into individual units Demand for public good is the maximum individuals are willing to pay for the amount of the good that is available Demand for public good is the vertical summation. Think Price as a function of quantity, P = Q
21 Price of missiles $6 $4 $3 $2 $1 D JERRY D BEN SMB=D BEN+JERRY S=SMC 0 1 Notice: the sum of the marginal benefits equal the marginal social cost. 5 Quantity of missiles
22 Demand for Pure Public Goods For one Guard: Person A is willing to pay $300, person B $250 person C $200 Total for one guard = $750
23 You Try Bill s demand for hamburgers (a private good) is Q = 20-2P and Ted s demand is Q = 10 P 1. Write down an equation for the social marginal benefit of the consumption of the hamburger 2. Now suppose that hamburgers are a public good. Write down an equation for the social marginal benefit of hamburger consumption.
24 You Try Quantity Alice Ben Carolyn Don The table shows how the marginal benefit of a service varies for four consumers. a) Suppose the service is a pure private good and is sold in a competitive market with only buyers being the four in the table. If the market price of the product is $400, what is the quantity demanded? b) Suppose the service is a pure public good. What is the marginal social benefit of two units of service? c) If the MSC of the good is $2,000 what is the efficient output assuming that it is a pure private good? d) If the MSC of the good is $2,000 what is the efficient output assuming that it is a pure public good?
25 Efficiency of a Pure Public Good Review: The marginal social benefit of any given amount of a pure public good is the sum of the individual marginal benefits received by all consumers. Efficient quantity per time period corresponds to the point at which output is increased so that the sum of marginal benefits to consumers equals marginal social cost of the good. Efficiency conditions are: i i
26 From the perspective of Society Is one security guard efficient? Are two security guards efficient? Are three security guards efficient?
27 How to finance public goods Lindhal Pricing: When each person pays an amount equal to their marginal benefit. The government provides the public good and finances its provision through each person paying what it is worth to them
28 Examples International View When Iraq invaded Kuwait in 1990, which countries were at risk? Estimates of the cost of the war = $61 billion $54 billion came from other nations $17 billion from Saudi Arabia $16 billion from Kuwait $11 billion from Japan US left with $7 billion of the incremental costs of fighting the war. How is this like a Lindahl equilibrium? PROBLEM: If people know that they are required to pay a share of the cost of a public good dependent on their marginal benefits, they have an incentive to understate their true marginal benefits.
29 The Free Rider Problem Def A person who seeks to enjoy the benefits of a public good without contributing anything to the cost of financing. This strategy almost guarantees that the equilibrium amount of a pure public good will be less than the efficient amount. Problem becomes more acute in large groups where a free rider reasons that their contribution is less likely to be needed or missed Our government provides lots of public goods, how do they overcome the free rider problem? ANS: Compulsory finance! Taxes!
30 Examples WNYC has an estimated listening audience of 1 million people, but only 7.5% of their listeners support the station. In the United Kingdom, the BBC charges an annual licensing fee to anyone who owns and operates a TV. A 2000 study of the file-sharing software Gnutella showed that 70% of users download files only from others. The file-sharing software Kazaa assigns users ratings based on their ratio of uploads to downloads and then gives download priority to users according to their ratings. Cambridge, England, tried to provide 350 free green bicycles scattered throughout the city. Users were expected to return each bicycle to one of 15 stands after its use. Within four days, not a single bicycle could be found, most having been likely stolen and repainted. In Lexington KY, the system worked better, 95% retention rate of bicycles
31 Examples Business Improvement Districts It is infeasible to charge pedestrians a fee for using the streets, so cities use tax revenues to provide police, sanitation, and public works departments. Public provision of these services does not always work effectively. Example: New York City s Times Square The city government spent ten years attempting to clean up Times Square. A group of local businessmen decided to start a Business Improvement District (BID), a legal entity that privately provides local services, and funds these services with fees charged to local businesses. New York law is structured so that if the BID organizers can get over 60% of the local business community to join, then the BID can (think of a law) levy fees on all local businesses. Results: Crime has dropped significantly. The area is cleaner and more attractive. Business and tourism are booming.
A public good is often defined to be a good that is both nonrivalrous and nonexcludable in consumption.
Theory of Public Goods A public good is often defined to be a good that is both nonrivalrous and nonexcludable in consumption. The nonrivalrous property holds when use of a unit of the good by one consumer
More informationPublic Goods. 131 Undergraduate Public Economics Emmanuel Saez UC Berkeley
Public Goods 131 Undergraduate Public Economics Emmanuel Saez UC Berkeley 1 OUTLINE Chapter 7 7.1 Optimal Provision of Public Goods 7.2 Private Provision of Public Goods 7.3 Public Provision of Public
More informationPractice Questions Week 6 Day 1
Practice Questions Week 6 Day 1 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Economists assume that the goal of the firm is to a. maximize total revenue
More informationMidterm Exam #1 - Answers
Page 1 of 9 Midterm Exam #1 Answers Instructions: Answer all questions directly on these sheets. Points for each part of each question are indicated, and there are 1 points total. Budget your time. 1.
More informationPublic Goods & Externalities
Market Failure Public Goods & Externalities Spring 09 UC Berkeley Traeger 2 Efficiency 26 Climate change as a market failure Environmental economics is for a large part about market failures: goods (or
More informationnonrivalry => individual demand curves are summed vertically to get the aggregate demand curve for the public good.
Public Goods Public Goods have two distinct characteristics: non-rivalry: several individuals can consume the same good without diminishing its value non-excludability: an individual cannot be prevented
More information1. Supply and demand are the most important concepts in economics.
Page 1 1. Supply and demand are the most important concepts in economics. 2. Markets and Competition a. Market is a group of buyers and sellers of a particular good or service. P. 66. b. These individuals
More informationPublic Goods and Common Resources
Public Goods and Common Resources chapter: 17 1. The government is involved in providing many goods and services. For each of the goods or services listed, determine whether it is rival or nonrival in
More informationChapter 03 The Concept of Elasticity and Consumer and
Chapter 03 The Concept of Elasticity and Consumer and Multiple Choice Questions Use the following Figure 3.1 to answer questions 1-4: Figure 3.1 1. In Figure 3.1, if demand is considered perfectly elastic,
More informationManagerial Economics Prof. Trupti Mishra S.J.M. School of Management Indian Institute of Technology, Bombay. Lecture - 13 Consumer Behaviour (Contd )
(Refer Slide Time: 00:28) Managerial Economics Prof. Trupti Mishra S.J.M. School of Management Indian Institute of Technology, Bombay Lecture - 13 Consumer Behaviour (Contd ) We will continue our discussion
More informationMarket Failure. presented by: Dr. Ellen Sewell esewell@uncc.edu
Market Failure presented by: Dr. Ellen Sewell esewell@uncc.edu In general, a system of competitive markets will produce a socially optimal allocation of resources. What does this mean? When does a market
More informationName Eco200: Practice Test 1 Covering Chapters 10 through 15
Name Eco200: Practice Test 1 Covering Chapters 10 through 15 1. Many observers believe that the levels of pollution in our society are too high. a. If society wishes to reduce overall pollution by a certain
More informationFigure 1. D S (private) S' (social) Quantity (tons of medicine)
Price per ton Practice Homework Pollution & Environment Economics 101 The Economic Way of Thinking 1. Suppose that the production of pharmaceuticals generates pollution of the Columbia River, which is
More informationSome buidup and explanation for the above definition:
Public commodities erm: draft Dec. 8, 2015 stuff related to chapter 17 in KW Note that I have use the noun commodity rather than the noun good, as in public commodity rather than public good. It is more
More informationb. Cost of Any Action is measure in foregone opportunities c.,marginal costs and benefits in decision making
1 Economics 130-Windward Community College Review Sheet for the Final Exam This final exam is comprehensive in nature and in scope. The test will be divided into two parts: a multiple-choice section and
More informationFigure 1. Quantity (tons of medicine) b. What is represented by the vertical distance between the two supply curves?
Price per ton Practice Homework Pollution & Environment Economics 101 The Economic Way of Thinking 1. Suppose that the production of pharmaceuticals generates pollution of the Columbia River, which is
More informationEXAM TWO REVIEW: A. Explicit Cost vs. Implicit Cost and Accounting Costs vs. Economic Costs:
EXAM TWO REVIEW: A. Explicit Cost vs. Implicit Cost and Accounting Costs vs. Economic Costs: Economic Cost: the monetary value of all inputs used in a particular activity or enterprise over a given period.
More informationChapter 6 Competitive Markets
Chapter 6 Competitive Markets After reading Chapter 6, COMPETITIVE MARKETS, you should be able to: List and explain the characteristics of Perfect Competition and Monopolistic Competition Explain why a
More informationEcon 202 Exam 2 Practice Problems
Econ 202 Exam 2 Practice Problems Principles of Microeconomics Dr. Phillip Miller Multiple Choice Identify the choice that best completes the statement or answers the question. Chapter 6 1. If a binding
More informationMarginal cost. Average cost. Marginal revenue 10 20 40
Economics 101 Fall 2011 Homework #6 Due: 12/13/2010 in lecture Directions: The homework will be collected in a box before the lecture. Please place your name, TA name and section number on top of the homework
More informationPractice Questions Week 8 Day 1
Practice Questions Week 8 Day 1 Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The characteristics of a market that influence the behavior of market participants
More informationECON 103, 2008-2 ANSWERS TO HOME WORK ASSIGNMENTS
ECON 103, 2008-2 ANSWERS TO HOME WORK ASSIGNMENTS Due the Week of June 23 Chapter 8 WRITE [4] Use the demand schedule that follows to calculate total revenue and marginal revenue at each quantity. Plot
More information4 THE MARKET FORCES OF SUPPLY AND DEMAND
4 THE MARKET FORCES OF SUPPLY AND DEMAND IN THIS CHAPTER YOU WILL Learn what a competitive market is Examine what determines the demand for a good in a competitive market Chapter Overview Examine what
More informationMarket Supply in the Short Run
Equilibrium in Perfectly Competitive Markets (Assume for simplicity that all firms have access to the same technology and input markets, so they all have the same cost curves.) Market Supply in the Short
More informationEconomics 101 Multiple Choice Questions for Final Examination Miller
Economics 101 Multiple Choice Questions for Final Examination Miller PLEASE DO NOT WRITE ON THIS EXAMINATION FORM. 1. Which of the following statements is correct? a. Real GDP is the total market value
More informationc. Given your answer in part (b), what do you anticipate will happen in this market in the long-run?
Perfect Competition Questions Question 1 Suppose there is a perfectly competitive industry where all the firms are identical with identical cost curves. Furthermore, suppose that a representative firm
More informationchapter >> Consumer and Producer Surplus Section 3: Consumer Surplus, Producer Surplus, and the Gains from Trade
chapter 6 >> Consumer and Producer Surplus Section 3: Consumer Surplus, Producer Surplus, and the Gains from Trade One of the nine core principles of economics we introduced in Chapter 1 is that markets
More informationchapter >> Making Decisions Section 2: Making How Much Decisions: The Role of Marginal Analysis
chapter 7 >> Making Decisions Section : Making How Much Decisions: The Role of Marginal Analysis As the story of the two wars at the beginning of this chapter demonstrated, there are two types of decisions:
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
MBA 640 Survey of Microeconomics Fall 2006, Quiz 6 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A monopoly is best defined as a firm that
More informationThe formula to measure the rice elastici coefficient is Percentage change in quantity demanded E= Percentage change in price
a CHAPTER 6: ELASTICITY, CONSUMER SURPLUS, AND PRODUCER SURPLUS Introduction Consumer responses to changes in prices, incomes, and prices of related products can be explained by the concept of elasticity.
More informationCHAPTER 1: LIMITS, ALTERNATIVES, AND CHOICES
CHAPTER 1: LIMITS, ALTERNATIVES, AND CHOICES Introduction At the heart of the study of economics is the simple but very real prospect that we cannot have it all. We have too few resources to meet all of
More informationConsumers face constraints on their choices because they have limited incomes.
Consumer Choice: the Demand Side of the Market Consumers face constraints on their choices because they have limited incomes. Wealthy and poor individuals have limited budgets relative to their desires.
More informationLECTURE NOTES ON MACROECONOMIC PRINCIPLES
LECTURE NOTES ON MACROECONOMIC PRINCIPLES Peter Ireland Department of Economics Boston College peter.ireland@bc.edu http://www2.bc.edu/peter-ireland/ec132.html Copyright (c) 2013 by Peter Ireland. Redistribution
More informationI. Introduction to Taxation
University of Pacific-Economics 53 Lecture Notes #17 I. Introduction to Taxation Government plays an important role in most modern economies. In the United States, the role of the government extends from
More informationLong Run Economic Growth Agenda. Long-run Economic Growth. Long-run Growth Model. Long-run Economic Growth. Determinants of Long-run Growth
Long Run Economic Growth Agenda Long-run economic growth. Determinants of long-run growth. Production functions. Long-run Economic Growth Output is measured by real GDP per capita. This measures our (material)
More informationMarket Failure. EC4004 Lecture 9
Market Failure EC4004 Lecture 9 Today. Online Exam. Quantity Demanded, Quantity Supplied at each price 10 9 8 7 6 5 4 3 2 1 Supply at each Price, S(p) t Demand at each Price, D(p) 1 2 3 4 5 6 7 8 9 10
More informationFiscal Policy: Structural/Cyclical. Size of government Questions And Business Cycle Smoothing Issues
Fiscal Policy: Structural/Cyclical Size of government Questions And Business Cycle Smoothing Issues When is government a preferred provider of goods? What is a PURE PUBLIC GOOD? My consumption of the good
More informationCommon in European countries government runs telephone, water, electric companies.
Public ownership Common in European countries government runs telephone, water, electric companies. US: Postal service. Because delivery of mail seems to be natural monopoly. Private ownership incentive
More informationRelative and Absolute Change Percentages
Relative and Absolute Change Percentages Ethan D. Bolker Maura M. Mast September 6, 2007 Plan Use the credit card solicitation data to address the question of measuring change. Subtraction comes naturally.
More informationECONOMICS OF PEACE AND SECURITY Global and Regional Security Alliances - Carlos Seiglie and Sylvie Matelly UNESCO EOLSS
GLOBAL AND REGIONAL SECURITY ALLIANCES Carlos Seiglie Rutgers University, NJ, USA Sylvie Matelly Université Pierre Mendes France, Grenoble, France Keywords: collective action, public good, regional security
More informationName: Date: 3. Variables that a model tries to explain are called: A. endogenous. B. exogenous. C. market clearing. D. fixed.
Name: Date: 1 A measure of how fast prices are rising is called the: A growth rate of real GDP B inflation rate C unemployment rate D market-clearing rate 2 Compared with a recession, real GDP during a
More informationProblem Set #5-Key. Economics 305-Intermediate Microeconomic Theory
Problem Set #5-Key Sonoma State University Economics 305-Intermediate Microeconomic Theory Dr Cuellar (1) Suppose that you are paying your for your own education and that your college tuition is $200 per
More informationChapter 9: Perfect Competition
Chapter 9: Perfect Competition Perfect Competition Law of One Price Short-Run Equilibrium Long-Run Equilibrium Maximize Profit Market Equilibrium Constant- Cost Industry Increasing- Cost Industry Decreasing-
More informationEconomics 103h Fall l 2012: Review Questions for Midterm 2
Economics 103h Fall l 2012: Review Questions for Midterm 2 Essay/Graphing questions 1, Explain the shape of the budget line. 2. What shifts the budget line and why? Give an example in words and demonstrate
More informationName Eco200: Practice Test 2 Covering Chapters 10 through 15
Name Eco200: Practice Test 2 Covering Chapters 10 through 15 1. Four roommates are planning to spend the weekend in their dorm room watching old movies, and they are debating how many to watch. Here is
More informationAnnex 8. Market Failure in Broadcasting
Annex 8 Market Failure in Broadcasting 202 Review of the Future Funding of the BBC Market Failure in the Broadcasting Industry An efficient broadcasting market? Economic efficiency is a situation in which
More informationQuantity of trips supplied (millions)
Taxes chapter: 7 1. The United tates imposes an excise tax on the sale of domestic airline tickets. Let s assume that in 2010 the total excise tax was $6.10 per airline ticket (consisting of the $3.60
More informationSupplement Unit 1. Demand, Supply, and Adjustments to Dynamic Change
1 Supplement Unit 1. Demand, Supply, and Adjustments to Dynamic Change Introduction This supplemental highlights how markets work and their impact on the allocation of resources. This feature will investigate
More informationBritepaper. How to grow your business through events 10 easy steps
Britepaper How to grow your business through events 10 easy steps 1 How to grow your business through events 10 easy steps As a small and growing business, hosting events on a regular basis is a great
More informationChapter 7: Market Structures Section 1
Chapter 7: Market Structures Section 1 Key Terms perfect competition: a market structure in which a large number of firms all produce the same product and no single seller controls supply or prices commodity:
More information13. If Y = AK 0.5 L 0.5 and A, K, and L are all 100, the marginal product of capital is: A) 50. B) 100. C) 200. D) 1,000.
Name: Date: 1. In the long run, the level of national income in an economy is determined by its: A) factors of production and production function. B) real and nominal interest rate. C) government budget
More informationUnit 9: Utility, Externalities, and Factor Markets Lesson 4: Externalities
Unit 9: Utility, Externalities, and Factor Markets Lesson 4: Externalities Objectives: - Define externality - Draw negative and positive externality graphs. - Explain the remedies for positive and negative
More informationANSWERS TO END-OF-CHAPTER QUESTIONS
ANSWERS TO END-OF-CHAPTER QUESTIONS 9-1 Explain what relationships are shown by (a) the consumption schedule, (b) the saving schedule, (c) the investment-demand curve, and (d) the investment schedule.
More informationCOMM 220: Ch 17 and 18 Multiple Choice Questions Figure 18.1
COMM 220: Ch 17 and 18 Multiple Choice Questions 1) When sellers have more information about products than buyers do, we would expect A) sellers to get higher prices for their goods than they could otherwise.
More informationchapter: Solution Externalities
Externalities chapter: 16 1. What type of externality (positive or negative) is present in each of the following examples? Is the marginal social benefit of the activity greater than or equal to the marginal
More informationModule 49 Consumer and Producer Surplus
What you will learn in this Module: The meaning of consumer surplus and its relationship to the demand curve The meaning of producer surplus and its relationship to the supply curve Module 49 Consumer
More informationChapter 1 Lecture Notes: Economics for MBAs and Masters of Finance
Chapter 1 Lecture Notes: Economics for MBAs and Masters of Finance Morris A. Davis Cambridge University Press stands for Gross Domestic Product. Nominal is the dollar value of all goods and services that
More informationSecond Degree Price Discrimination - Examples 1
Second Degree Discrimination - Examples 1 Second Degree Discrimination and Tying Tying is when firms link the sale of two individual products. One classic example of tying is printers and ink refills.
More informationFinal Exam (Version 1) Answers
Final Exam Economics 101 Fall 2003 Wallace Final Exam (Version 1) Answers 1. The marginal revenue product equals A) total revenue divided by total product (output). B) marginal revenue divided by marginal
More informationChapter 14 Monopoly. 14.1 Monopoly and How It Arises
Chapter 14 Monopoly 14.1 Monopoly and How It Arises 1) One of the requirements for a monopoly is that A) products are high priced. B) there are several close substitutes for the product. C) there is a
More informationThe Central Idea CHAPTER 1 CHAPTER OVERVIEW CHAPTER REVIEW
CHAPTER 1 The Central Idea CHAPTER OVERVIEW Economic interactions involve scarcity and choice. Time and income are limited, and people choose among alternatives every day. In this chapter, we study the
More informationThe Cost of Production
The Cost of Production 1. Opportunity Costs 2. Economic Costs versus Accounting Costs 3. All Sorts of Different Kinds of Costs 4. Cost in the Short Run 5. Cost in the Long Run 6. Cost Minimization 7. The
More informationSarah Dickson Otago University Degree: Law and BA majoring in Economics
Sarah Dickson Otago University Degree: Law and BA majoring in Economics The health sector faces a dual problem. The first is essentially an economic question; the issue of how to keep public health spending
More informationLesson 4 - Property Rights in a Market Economy
Lesson 4 - Property Rights in a Market Economy INTRODUCTION Economics All market economies have several basic characteristics in common including private property, free enterprise, self-interest, competition,
More informationPART A: For each worker, determine that worker's marginal product of labor.
ECON 3310 Homework #4 - Solutions 1: Suppose the following indicates how many units of output y you can produce per hour with different levels of labor input (given your current factory capacity): PART
More informationStudent Writing Guide. Fall 2009. Lab Reports
Student Writing Guide Fall 2009 Lab Reports The manuscript has been written three times, and each rewriting has discovered errors. Many must still remain; the improvement of the part is sacrificed to the
More informationxxx Lesson 11 1. Comprehend the writing process 2. Respond positively to the writing process
xxx Lesson 11 The Writing Process Overview: This lesson will focus on the writing process and how it relates to communication. Learners will be taught what the writing process is, its parts, and how they
More informationMicroeconomics Sept. 16, 2010 NOTES ON CALCULUS AND UTILITY FUNCTIONS
DUSP 11.203 Frank Levy Microeconomics Sept. 16, 2010 NOTES ON CALCULUS AND UTILITY FUNCTIONS These notes have three purposes: 1) To explain why some simple calculus formulae are useful in understanding
More informationECONOMICS PAPER 2/2 GRADE 12 JUNE EXAMINATION 2014 MEMORANDUM
ECONOMICS PAPER 2/2 GRADE 12 JUNE EXAMINATION 2014 MEMORANDUM Page 1 of 11 ECONOMICS PAPER 2/2 GRADE 12 JUNE EXAMINATION 2014 MEMORANDUM TOTAL: 150 SECTION A QUESTION 1 (Bloom level 1: Remember) 1.1.1
More informationReport writing 3. Writing accounting and finance reports
1. 2. 3. 4. 1. Overview 2. Writing laboratory reports 3. Writing accounting and finance reports 4. Writing technical reports Report writing 3. Writing accounting and finance reports The basic routine for
More informationChapter 17. The Economics of Pollution Control
Chapter 17 The Economics of Pollution Control Economic Rationale for Regulating Pollution Pollution as an Externality -pollution problems are classic cases of a negative externality -the MSC of production
More informationAmbassador Description
Welcome! You have made a decision to help improve the quality of life for residents and visitors in our region by taking part in the volunteer program of Great Rivers Greenway. We are proud to provide
More informationEquilibrium of a firm under perfect competition in the short-run. A firm is under equilibrium at that point where it maximizes its profits.
Equilibrium of a firm under perfect competition in the short-run. A firm is under equilibrium at that point where it maximizes its profits. Profit depends upon two factors Revenue Structure Cost Structure
More informationTraffic Safety Quiz Show. Grade level: 4/5
Traffic Safety Quiz Show Grade level: 4/5 Introduction: In this activity, students play a game that allows them to demonstrate and develop bicycle and pedestrian safety knowledge. The game is based on
More information1 SHORT ANSWER QUESTIONS
Tort Law Suggested Answers 1 SHORT ANSWER QUESTIONS Comment on the Following: 1. [2002, Midterm #2a] Suppose that all doctors were held strictly liable for injuries they cause to their patients. What are
More informationChapter 24. What will you learn in this chapter? Valuing an economy. Measuring the Wealth of Nations
Chapter 24 Measuring the Wealth of Nations 2014 by McGraw-Hill Education 1 What will you learn in this chapter? How to calculate gross domestic product (GDP). Why each component of GDP is important. What
More informationLearning Objectives. Chapter 6. Market Structures. Market Structures (cont.) The Two Extremes: Perfect Competition and Pure Monopoly
Chapter 6 The Two Extremes: Perfect Competition and Pure Monopoly Learning Objectives List the four characteristics of a perfectly competitive market. Describe how a perfect competitor makes the decision
More informationchapter Perfect Competition and the >> Supply Curve Section 3: The Industry Supply Curve
chapter 9 The industry supply curve shows the relationship between the price of a good and the total output of the industry as a whole. Perfect Competition and the >> Supply Curve Section 3: The Industry
More informationQE1: Economics Notes 1
QE1: Economics Notes 1 Box 1: The Household and Consumer Welfare The final basket of goods that is chosen are determined by three factors: a. Income b. Price c. Preferences Substitution Effect: change
More informationWHY ADVERTISING THROUGH REAL-TIME BIDDING NEEDS A NEW BUYING MODEL
Quantcast Whitepaper WHY ADVERTISING THROUGH REAL-TIME BIDDING NEEDS A NEW BUYING MODEL Konrad Feldman CEO, Quantcast 2012 Quantcast Corporation. All Rights Reserved. Quantcast Whitepaper Why Advertising
More informationExternalities: Problems and Solutions. 131 Undergraduate Public Economics Emmanuel Saez UC Berkeley
Externalities: Problems and Solutions 131 Undergraduate Public Economics Emmanuel Saez UC Berkeley 1 OUTLINE Chapter 5 5.1 Externality Theory 5.2 Private-Sector Solutions to Negative Externalities 5.3
More informationSUPPLY AND DEMAND : HOW MARKETS WORK
SUPPLY AND DEMAND : HOW MARKETS WORK Chapter 4 : The Market Forces of and and demand are the two words that economists use most often. and demand are the forces that make market economies work. Modern
More informationChapter 8 Production Technology and Costs 8.1 Economic Costs and Economic Profit
Chapter 8 Production Technology and Costs 8.1 Economic Costs and Economic Profit 1) Accountants include costs as part of a firm's costs, while economists include costs. A) explicit; no explicit B) implicit;
More informationNatural Resources and International Trade
Department of Economics University of Roma Tre Academic year: 2013 2014 Natural Resources and International Trade Instructors: Prof. Silvia Nenci Prof. Luca Salvatici silvia.nenci@uniroma3.it luca.salvatici@uniroma3.it
More informationWHY STUDY PUBLIC FINANCE?
Solutions and Activities to CHAPTER 1 WHY STUDY PUBLIC FINANCE? Questions and Problems 1. Many states have language in their constitutions that requires the state to provide for an adequate level of education
More informationMay 25th, 2016--"Car Buying: How to Avoid the Extra Stress"--Mary Dittfurth
May 25th, 2016--"Car Buying: How to Avoid the Extra Stress"--Mary Dittfurth The car-buying process can get pretty stressful, especially if you re not prepared for it. Car buying is supposed to be exciting,
More informationSocial Return on Investment
Social Return on Investment Valuing what you do Guidance on understanding and completing the Social Return on Investment toolkit for your organisation 60838 SROI v2.indd 1 07/03/2013 16:50 60838 SROI v2.indd
More informationOptions on Beans For People Who Don t Know Beans About Options
Options on Beans For People Who Don t Know Beans About Options Remember when things were simple? When a call was something you got when you were in the bathtub? When premium was what you put in your car?
More informationFigure 4-1 Price Quantity Quantity Per Pair Demanded Supplied $ 2 18 3 $ 4 14 4 $ 6 10 5 $ 8 6 6 $10 2 8
Econ 101 Summer 2005 In-class Assignment 2 & HW3 MULTIPLE CHOICE 1. A government-imposed price ceiling set below the market's equilibrium price for a good will produce an excess supply of the good. a.
More informationElasticity. Demand is inelastic if it does not respond much to price changes, and elastic if demand changes a lot when the price changes.
Elasticity The price elasticity of demand measures the sensitivity of the quantity demanded to changes in the price. Demand is inelastic if it does not respond much to price changes, and elastic if demand
More informationThe Role and uses of Peer-to-Peer in file-sharing. Computer Communication & Distributed Systems EDA 390
The Role and uses of Peer-to-Peer in file-sharing Computer Communication & Distributed Systems EDA 390 Jenny Bengtsson Prarthanaa Khokar jenben@dtek.chalmers.se prarthan@dtek.chalmers.se Gothenburg, May
More informationGovernment intervention
Government intervention Explain the term free market. In a free market, governments stand back and let the forces of supply and demand determine price and output. There is no direct (eg regulations) or
More informationchapter >> Consumer and Producer Surplus Section 1: Consumer Surplus and the Demand Curve
chapter 6 A consumer s willingness to pay for a good is the maximum price at which he or she would buy that good. >> Consumer and Producer Surplus Section 1: Consumer Surplus and the Demand Curve The market
More informationFocus on Essay Writing
Focus on Essay Writing Essay writing is a process and a product. You need to focus on the process in order to achieve a high quality product. What is an essay? The word essay originally meant to test or
More informationACCEPTABLE USE OF COMPUTERS IN WILTSHIRE LIBRARIES
ACCEPTABLE USE OF COMPUTERS IN WILTSHIRE LIBRARIES Policy Statement Introduction 1. Wiltshire Libraries provide access to the Internet and other computer facilities to support the educational, recreational
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Chapter 11 Monopoly practice Davidson spring2007 MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A monopoly industry is characterized by 1) A)
More informationThe Free Market Approach. The Health Care Market. Sellers of Health Care. The Free Market Approach. Real Income
The Health Care Market Who are the buyers and sellers? Everyone is a potential buyer (consumer) of health care At any moment a buyer would be anybody who is ill or wanted preventive treatment such as a
More informationA. a change in demand. B. a change in quantity demanded. C. a change in quantity supplied. D. unit elasticity. E. a change in average variable cost.
1. The supply of gasoline changes, causing the price of gasoline to change. The resulting movement from one point to another along the demand curve for gasoline is called A. a change in demand. B. a change
More informationCHAPTER 14 EXTERNALITIES, MARKET FAILURE, AND PUBLIC CHOICE
CHAPTER 14 EXTERNALITIES, MARKET FAILURE, AND PUBLIC CHOICE Chapter in a Nutshell So far, this book has described consumption and production of goods where all of the costs and benefits are borne directly
More information