Презентация Chapter 10. Externalities онлайн
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- Всего слайдов:26 слайдов
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Слайды и текст к этой презентации:
№3 слайд
![Externalities Examples of](/documents_6/f3f9435c55bf232909c70edb3b5b7877/img2.jpg)
Содержание слайда: Externalities
Examples of negative externalities:
Exhaust from automobiles
Barking dogs
Examples of positive externalities:
Restored historic buildings
Research into new technologies
Decision maker - fails to account for externalities
Government: protect the interests of bystanders
№4 слайд
![Externalities and Market](/documents_6/f3f9435c55bf232909c70edb3b5b7877/img3.jpg)
Содержание слайда: Externalities and Market Inefficiency
Externalities
Cause markets to allocate resources inefficiently
Welfare economics: a recap
Demand curve – value to consumers
Prices they are willing to pay
Supply curve – cost to suppliers
Equilibrium quantity and price
Efficient
Maximizes sum of producer & consumer surplus
№6 слайд
![Externalities and Market](/documents_6/f3f9435c55bf232909c70edb3b5b7877/img5.jpg)
Содержание слайда: Externalities and Market Inefficiency
Negative externalities
Pollution
Cost to society (of producing aluminum)
Larger than the cost to the aluminum producers
Social cost - supply
Private costs of the producers
Plus the costs to those bystanders affected adversely by the negative externality
Social cost curve – above the supply curve
№8 слайд
![Externalities and Market](/documents_6/f3f9435c55bf232909c70edb3b5b7877/img7.jpg)
Содержание слайда: Externalities and Market Inefficiency
Negative externalities
Optimum quantity produced
Maximize total welfare
Smaller than market equilibrium quantity
Government – correct market failure
Internalizing the externality
Altering incentives so that people take account of the external effects of their actions
E.g.: tax producers
Shift supply upward – by the size of the tax
Tax – value of negative externality
№12 слайд
![Externalities and Market](/documents_6/f3f9435c55bf232909c70edb3b5b7877/img11.jpg)
Содержание слайда: Externalities and Market Inefficiency
Negative externalities
Markets - produce a larger quantity than is socially desirable
Positive externalities
Markets - produce a smaller quantity than is socially desirable
Government: internalize the externality
Taxing goods that have negative externalities
Subsidizing goods that have positive externalities
№13 слайд
![Technology spillovers,](/documents_6/f3f9435c55bf232909c70edb3b5b7877/img12.jpg)
Содержание слайда: Technology spillovers, industrial policy, and patent protection
Technology spillover = Positive externality
Impact of one firm’s research and production efforts on other firms’ access to technological advance
Government: internalize the externality
Subsidy = value of the technology spillover
Industrial policy
Government intervention in the economy that aims to promote technology-enhancing industries
Patent law
Protect the rights of inventors by giving them exclusive use of their inventions for a period of time
№14 слайд
![Public Policies Toward](/documents_6/f3f9435c55bf232909c70edb3b5b7877/img13.jpg)
Содержание слайда: Public Policies Toward Externalities
Command-and-control policies: regulation
Regulate behavior directly
Making certain behaviors either required or forbidden
Cannot eradicate pollution
Environmental Protection Agency (EPA)
Develop and enforce regulations
Protecting the environment
Dictates maximum level of pollution
Requires that firms adopt a particular technology to reduce emissions
№15 слайд
![Public Policies Toward](/documents_6/f3f9435c55bf232909c70edb3b5b7877/img14.jpg)
Содержание слайда: Public Policies Toward Externalities
Market-based policies
Provide incentives
Private decision makers - choose to solve the problem on their own
1. Corrective taxes and subsidies
Corrective tax
Induce private decision makers to take account of the social costs that arise from a negative externality
Places a price on the right to pollute
Reduce pollution at a lower cost to society
№17 слайд
![Why is gasoline taxed so](/documents_6/f3f9435c55bf232909c70edb3b5b7877/img16.jpg)
Содержание слайда: Why is gasoline taxed so heavily?
How high should the tax on gasoline be?
Most European countries
Gasoline taxes - much higher than those in the U.S.
2007 study, Journal of Economic Literature
Optimal corrective tax on gasoline was $2.10 per gallon
Actual tax in the United States: 40 cents
Tax revenue from a gasoline tax
Lower taxes that distort incentives and cause deadweight losses
Some government regulations
Production of fuel-efficient cars – unnecessary
№18 слайд
![Public Policies Toward](/documents_6/f3f9435c55bf232909c70edb3b5b7877/img17.jpg)
Содержание слайда: Public Policies Toward Externalities
Market-based policies
2. Tradable pollution permits
Voluntary transfer of the right to pollute from one firm to another
New scarce resource: pollution permits
Market to trade permits
Firm’s willingness to pay
Depend on its cost of reducing pollution
№19 слайд
![Public Policies Toward](/documents_6/f3f9435c55bf232909c70edb3b5b7877/img18.jpg)
Содержание слайда: Public Policies Toward Externalities
2. Tradable pollution permits
Advantage of free market for pollution permits
Initial allocation of pollution permits
Doesn't matter
Firms - reduce pollution at a low cost
Sell whatever permits they get
Firms - reduce pollution only at a high cost
Buy whatever permits they need
Efficient final allocation
№22 слайд
![Public Policies Toward](/documents_6/f3f9435c55bf232909c70edb3b5b7877/img21.jpg)
Содержание слайда: Public Policies Toward Externalities
Objections to the economic analysis of pollution
“We cannot give anyone the option of polluting for a fee.” - former Senator Edmund Muskie
People face trade-offs
Eliminating all pollution is impossible
Clean water and clean air – opportunity cost
Lower standard of living
№23 слайд
![Public Policies Toward](/documents_6/f3f9435c55bf232909c70edb3b5b7877/img22.jpg)
Содержание слайда: Public Policies Toward Externalities
Clean environment - is a normal good
Positive income elasticity
Rich countries can afford a cleaner environment
More rigorous environmental protection
Clean air and clean water - law of demand
The lower the price of environmental protection
The more the public will want
Economic approach
Pollution permits and corrective taxes
Reduces the cost of environmental protection
Increase demand for a clean environment
№25 слайд
![Private Solutions to](/documents_6/f3f9435c55bf232909c70edb3b5b7877/img24.jpg)
Содержание слайда: Private Solutions to Externalities
The Coase theorem
If private parties can bargain without cost over the allocation of resources
They can solve the problem of externalities on their own
Private economic actors
Can solve the problem of externalities among themselves
Whatever the initial distribution of rights
Interested parties - reach a bargain:
Everyone is better off & Outcome is efficient
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