Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
17 Cards in this Set
- Front
- Back
|
Define positive externalities
|
An individual creates benefits for others without being compensated. I.E. vaccines education
|
|
|
Define negative externalities
|
An individual imposes costs on someone else without compensating them. I.E. Pollution
|
|
|
Define hedonics
|
some amount of money people would be willing to accept as compensation for the pollution
|
|
|
Define cost of illness
|
people spend money for
|
|
|
How do you measure the COST of abatement?
|
Collect information about available tech, its price and how effective it is
|
|
|
When is it a good idea to impose a tax on output?
|
-Hard to monitor emissions
-Technology to reduce emissions is very costly -Substitute goods are less polluting |
|
|
When is it good to put a fee on emissions?
|
When it is easy to monitor emissions and when it is possible to reduce emissions without reducint output of the good
|
|
|
When is it good to use the permit system
|
When you can issue a fixed number of permits which limits pollution
AND when you can afford the expense |
|
|
When is it good to use the direct regulation or uniform standard
|
When each firm complies with the same standard
|
|
|
How do you measure the BENEFIT of abatement?
|
Benefit comes from avoiding damages caused by pollution
|
|
|
How is the optimal extraction rate determined for natural resources?
|
by the discount rate
|
|
|
When does optimal extraction occur for natural resources?
|
When marginal surplus grows at the rate of discount
|
|
|
What institutions are important to achieve optimal rate of extraction?
|
assign Property rights, have a competitive market structure, and open access
|
|
|
Define sustainability
|
the maximum catch that can be taken from a fishery over an indefinite period without causing the stocks to be depleted
|
|
|
Why are property rights essential for renewable natural resources?
|
Good for conservation and creates a strong market economy
|
|
|
What is the biggest advantage of putting a fee on emissions?
|
provides incentive for further cleanup
|
|
|
What is the biggest advantage of using the permit system in a market?
|
firms with a high cost of cleanup clean up less and firms with a low cost cleanup more
total amount of pollution is fixed |
