Chapter10

Externalities PowerPoint Slides prepared by: Andreea CHIRITESCU Eastern Illinois University © 2011 Cengage Learning. alone Rights Reserved. May non be copied, scanned, or duplicated, in unscathed or in part, except for recitation as permitted in a exhibit distributed with a reliable(a) product or service or differently on a password-protected website for classroom implement. 1 Externalities Externality The unpaid jounce of one persons actions on the eudaimonia of a bystander Market failure Negative externality bushel on the bystander is adverse Positive externality Impact on the bystander is beneficial © 2011 Cengage Learning. all Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for practice as permitted in a license distributed with a unbent product or service or otherwise on a password-protected website for classroom use. 2 Externalities Market equilibrium ineffectual allocation of resources Buyers and sellers except the external effects of their actions when deciding how oft to demand or supply Fails to maximize the total receipts to society as a whole Government Protects the interests of bystanders © 2011 Cengage Learning. All Rights Reserved.

May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3 Externalities & Market Inefficiency Welfare economics: a summarise Demand curve value to con couplingers Prices they are unstrained to pay try curve cost to suppliers Equili brium cadence and price Efficient Maximi! zes sum of producer and consumer surplus © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for...If you wish to get a full essay, align it on our website: OrderEssay.net

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