Micro Chapter 10
a local cafe which allowed patrons to smoke was recently forced to close its doors because it did not comply with the local clean air standards. this decision provides an example of
Pigovian taxes
a positive externality occurs when
a. Jack receives a benefit from John's consumption of a certain good.
Research into new technologies
a. provides positive externalities because it creates knowledge others can use.
The height of the supply curve at any given quantity of coal shows the
cost to the producer of the last unit of coal sold
Pigovian taxes
encourage consumers to avoid sales tax by shopping online
Hikers frequently claim that livestock grazing in wilderness recreation areas reduces the satisfaction of their recreational hiking experience
grazing cows create negative externalizations which make hiking less pleasant
A positive externality
is a benefit to a market bystander
one drawback to industrial policy is that
measuring the size of spillovers from different markets is difficult.
Because decisions in a market economy are guided by individual self-interest, there is
nevertheless the ability to achieve desirable economic well being for society as a whole
reaching an efficient bargain is difficult when the
number of interested parties is large
According to the coase theorem
private parties can bargain to reach an efficient outcome
to enhance the well being of society, a social planner will encourage firms to increase production when
technology spillovers are associated with production
At any given quantity, the height of the supply curve for pliers shows the
the cost of the marginal seller