Ricard Microeconomics Ch. 10

Barking dogs create a negative externality

In the presence of a negative externality, the social cost of the good exceeds the private cost.

"We cannot give anyone the option of polluting for a fee."

Economists generally prefer regulations over corrective taxes when dealing with pollution.

Successful private solutions to problems caused by externalities depends, in part, upon the number of interested parties

Pigovian taxes

The socially-optimal quantity of good x is larger than the market-equilibrium quantity of good x.

The benefits of charities:

If you do something that helps the well-being of others, your activity is

In some cases, private econ. actors can't solve the problem of externalities among themselves because of substantial ___

Joe engages in an activity that diminishes Kim's well-being. Joe pays no compensation to Kim for her loss in well-being

the uncompensated impact of one person's actions on the well-being of a bystander

The patent system is an incentive for researchers to produce something new

FCC (Federal Communications Commission) requires radio stations to adopt a technology to reduce dangerous radio waves

rule that suggests that efficient solutions to externalities can be determined through bargaining

Research into new technologies gives rise to a positive externality

Research into new technologies creates a negative externality.

In the absence of govt intervention, the price adjusts to reflect a balance between supply and demand ON ITS OWN

In Ch. 10 the article "What should we do about Climate Change?" the thing proposed to be taxed is

Restoring a historic building creates a negative externality.