Economics class notes
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1 year ago
1 year ago
1 year ago
  1. # April 9 Efficiency
  2. **Market failure** is an inability of a market to find an efficient solution
  3. Pollution is a market failure
  4. A **public good** is nonrival and nonexcludable
  5. - A good is **nonexcludable** if it is not possible to prevent others from
  6. consuming it
  7. - A good is **nonrival** if one person's consumption of the good does not make
  8. it impossible for others to consume it.
  9. Problems with public goods
  10. - **The Tragedy of the Commons** is that nonexcludable but rival goods become
  11. overused
  12. - **Little Incentive** to supply the good privately
  13. - The **free-rider problem** is that people take advantage of the public
  14. resource
  15. - The **drop in the bucket problem** is when