External link to Side effects of some market activities

Side effects of some market activities

There are unintended side effects of some market activities. In these cases, the market price does not reflect all relevant costs and benefits.  We call these instances externalities.  Pollution is one example of an externality. Please use the following questions to describe an instance where you, an acquaintance, or family member has experienced an externality.   1.How did it affect you (or your acquaintance or family […]

External link to McDonald’s Big Mac hamburgers.

McDonald’s Big Mac hamburgers.

ECN 205 Microeconomics Assignment 2 Name _______________________________________ 1. For each of the following pairs of products, state which are complements, which are substitutes, and which are unrelated. 10 points a. Pepsi and Coke b. Oscar Mayer hot dogs and Wonder hot dog buns c. Jiffy peanut butter and Smucker’s strawberry jam d. Hewlett-Packard printers and Texas Instruments hand calculators 2. For the following events, state […]

External link to Subsidies for firms that invest in clean technologies

Subsidies for firms that invest in clean technologies

From the list below, please choose a particular environmental policy that is being used in the United States. Write a 4–5-page paper (including the title page and reference list), that accomplishes all of the following: 1.Explains the policy  2.Gives an example where it has been used  3.Explains why it is has improved the problem it was meant to correct  4.Explains how economic principles are used […]

External link to Common Property Resources

Common Property Resources

Common Property Resources Common property resources[3] are resources for which no property rights have been defined. The difficulty with common property resources is that individuals may not have adequate incentives to en- gage in efforts to preserve or protect them. Consider, for example, the relative fates of cattle and buffalo in the United States in the nineteenth century. Cattle populations increased throughout the century, while […]

External link to External Costs and Government Intervention

External Costs and Government Intervention

External Costs and Government Intervention If an activity generates external costs, the decision makers generating the activity will not be faced with its full costs. Agents who impose these costs will carry out their activ- ities beyond the efficient level; those who consume them, facing too low a price, will consume too much. As a result, producers and consumers will carry out an excessive quantity […]

External link to External Costs and Benefits paper

External Costs and Benefits paper

External Costs and Benefits Suppose that in the course of production, the firms in a particular industry generate air pollution. These firms thus impose costs on others, but they do so outside the context of any market ex- change—no agreement has been made between the firms and the people affected by the pollution. The firms thus will not be faced with the costs of their […]

External link to Public Goods and the Government

Public Goods and the Government

Public Goods and the Government Because many individuals who benefit from public goods will not pay for them, private firms will pro- duce a smaller quantity of public goods than is efficient, if they produce them at all. In such cases, it may be desirable for government agencies to step in. Government can supply a greater quantity of the good by direct provision, by purchasing […]

External link to Public Goods and Market Failure

Public Goods and Market Failure

Public Goods and Market Failure Because free riders will prevent firms from being able to require consumers to pay for the benefits received from consuming a public good, output will be less than the efficient level. In the case shown here, private donations achieved a level of the public good of Q1 per period. The efficient level is Q*. The deadweight loss is shown by […]

External link to Special characteristics of public goods

Special characteristics of public goods

Public Goods Some goods are unlikely to be produced and exchanged in a market because of special characteristics of the goods themselves. The benefits of these goods are such that exclusion is not feasible. Once they are produced, anyone can enjoy them; there is no practical way to exclude people who have not paid for them from consuming them. Furthermore, the marginal cost of adding […]

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