The Coase Theorem
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if private parties can costlessly bargain over the allocation of resources,
they can solve the externalities problem on their own
,Wealth Inequality
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inequal distribution of assets
Producer Surplus
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amount a seller paid for a good minus seller cost, or P-Cost
The Tragedy of the Commons
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due to an externality; allowing one's flock to graze on the land reduces its
quality for other families; private incentives outweigh social incentives
Poverty line
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a #/$
, Consumer Surplus
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amount the buyer is willing to pay minus what the buyer actually pays;
WTP-P
How to find social cost =
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Private MC + Marginal External Cost
Common resources
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"open-access resources"; not excludable, cannot prevent free riders
Tradable Pollution permits
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issued with a face "pollution value"
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if private parties can costlessly bargain over the allocation of resources,
they can solve the externalities problem on their own
,Wealth Inequality
Give this one a try later!
inequal distribution of assets
Producer Surplus
Give this one a try later!
amount a seller paid for a good minus seller cost, or P-Cost
The Tragedy of the Commons
Give this one a try later!
due to an externality; allowing one's flock to graze on the land reduces its
quality for other families; private incentives outweigh social incentives
Poverty line
Give this one a try later!
a #/$
, Consumer Surplus
Give this one a try later!
amount the buyer is willing to pay minus what the buyer actually pays;
WTP-P
How to find social cost =
Give this one a try later!
Private MC + Marginal External Cost
Common resources
Give this one a try later!
"open-access resources"; not excludable, cannot prevent free riders
Tradable Pollution permits
Give this one a try later!
issued with a face "pollution value"
