Micro economic PUBLIC CHOICES AND PUBLIC GOODS参考.ppt

* * * * * * Notes and teaching tips: 5, 18, and 22. To view a full-screen figure during a class, click the red “expand” button. To return to the previous slide, click the red “shrink” button. To advance to the next slide, click anywhere on the full screen figure. * * No man (or woman) is an island. The main theme in this chapter is how to analyze the impact of negative or positive externality on the market allocation of resources, as well as the government’s ability to enhance efficiency: Cost externalities cause social costs to be under appreciated by resource allocation decision makers in the market, creating too much of the activity creating the externality to be produced. Benefit externalities cause social benefits to be under appreciated by resource allocation decision makers in the market, creating too little of the activity creating the externality to be produced. There are some correcting policies that the government can use to increase efficiency, but some are more effective than others. * * * * * * * * * * * * * The role of property rights in the market. Explain that when the property rights are well defined, the owner of that right receives the social benefit and bears the social cost of using that resource. Property rights “internalize” the externality. * * * * The best government policies emulate, rather than replace, the market process. Emphasize that of all the possible government policies to increase efficiency relative to unregulated market outcomes, the ones that can potentially work the best are those that emulate the market process rather than replace it. Make the polluters discover (and bear) the social costs of pollution. In the case of cost externalities like pollution, the government can choose from three policies: emissions charges, pollution taxes, or marketable pollution permits. All three policies require the government to initially assess the social marginal costs and benefits form pollution activities to find the initial optimal le