for michael smith
sozfhf
first_exam_fodder_10.17.23.xlsxDistinctions
| DISTINCTIONS | |
| "good" | Experiencing a "good' entails increased joy, increased pleasure, enhanced satisfaction or decreased displeasure, diminished dissatisfaction |
| "bad" | Experiencing a "bad" entails increased displeasure, diminished satisfaction or decreased pleasure, compromised satisfaction |
| Rivalry | |
| "good" | A good is rival if one person's experience (being privy to the good) diminishes the ability of others to experience the good |
| If a good is a pure private good, one person's experience precludes all others from enjoying the same good | |
| "bad" | A bad is rival if one person's displeasure (being privy to the bad) diminishes the displeasure of others experiencing the bad |
| If a bad is a pure nonrival bad, one person's experience of the bad precludes all others from experiencing the same bad | |
| Nonrivalry | |
| "good" | A good is nonrival if one person's 'being privy' to the good does not diminish the ability of others to experience the good, if one person's pleasure does not diminish another's pleasure. |
| If a good is a pure public good, if it is made available to one, it is immediately provided to others: the marginal cost of an additional user is zero | |
| The implication of this is that once the cost (potentially considerable) is incurred to provide the good to one person, it is not socially optimal to exclude others, even if it is feasible to exclude! | |
| "bad" | A bad is nonrival if one person's 'being privy' to the bad does not diminish the ability of others to experience the bad, if one person's displeasure does not diminish the displeasure of others |
| If a bad is a pure private bad, once one person is 'made privy' to the bad, it is immediately 'provided' to others | |
| Antirivalry | |
| "good" | A good is antirival is one persons's pleasure (at being provided with the good) increases the enjoyment of others using the good (e.g. internet!) |
| "bad" | A bad is antirival if one person's displeasure (in experiencing the bad) increases the displeasure of others experiencing the bad (e.g. shared pain) |
| Exclusivity | |
| "good" | it is feasible to prevent others from experiencing the good (to deprive others of the good) |
| Because 'free riders' cannot enjoy the experience without paying, the private sector will find it profitable to provide the good | |
| "bad" | it is feasible to prevent others from experiencing the bad (to deprive others of the bad) |
| Nonexclusivity | |
| "good" | It is not feasible (too expensive) to prevent others--'free riders'--from experiencing the good: positive externality! |
| Because 'free riders' can enjoy the experience without paying, it will not be profitable to provide the good. Either the private sector will not provide the good or it will offer the only in suboptimal quantities, requiring the public sector to step in. | |
| "bad" | It is not feasible (too expensive) to prevent others from experiencing the bad: negative externality! |
ECO 435
Def & Diff
| DEFINITIONS AND DIFFERENTIATIONS |
| Primary goods and services |
| Materials |
| by Nature |
| solid fuels, e.g. coal |
| solid metals & minerals, e.g. copper |
| liquid fuels, e.g. petroleum |
| gasenous fuels, e.g. natural gas |
| environmental medium: broadly the natural world that collectively constitute the environment, usually land, water & air, e.g. soil, aquifers, atmosphere |
| Secondary goods and services |
| by Humans |
| energy for market distribution, e.g. electricity |
| intermediate and final goods and services of types |
| Residuals |
| residuals-producer-recycled (to producers) |
| residuals-producer-discharged (to Nature-Sink) |
| residuals-consumer-recycled (to producers) |
| residuals-consumer-discharged (to Nature-Sink) |
| residuals-consumers-reused (recycled to consumers) |
| solid waste--pollutants that typically accumulate on land but capable of damaging land, water or air |
| effluents--fluid pollutants, or pollutants that principally damage water sources but are capable of damaging land, water or air |
| emissions (gaseous pollutants, or pollutants that principally damage the atmosphere but are capable of damaging land, water or air |
| cumulative versus noncumulative pollutants |
| local versus regional and global pollutants |
| point-source versus nonpoint-source pollutants |
| pollution: reversible and irreversible |
| (See basic terminology in Field & Field, p. 30) |
| source (as in Nature as a source of materials) and source (as in the location at which pollution occurs) |
| ambient quality (the amount of pollutants in the environment) |
| environmental quality (a broader notion of the environmental media, including ambient quality as well as visual and aesthetic qualities) |
| Markets |
| demand (for a "good" good or service)--the maximum price buyers are willing & able to pay to be 'privy' to a good |
| marginal willingness to pay versus total willingness to pay |
| supply (for a "good" good or service--the minimum price sellers are willing & able to accept to be 'deprived' of the good |
| marginal (opportunity) cost versus total (opportunity) cost |
| consumer surplus--the difference between the maximum consumers are willing & able to pay and what they did, in fact, spend |
| producer surplus--the difference between the minimum producers are willing & able to accept and what they did, in fact, receive |
| damages: negative impacts produced by environmental pollution |
| damage: reversible and irreversible |
| Markets may 'fail' (to achieve social optimality) |
| Nonrivalry results in |
| negative externalities or external costs, negative third party effects, negative spillover |
| positive externalities or external benefits, positive third party effects, positive spillover |
| Pigouvian tax: shifts market supply left (or market demand left) to 'internalize' a negative externalities |
| Pigouvian subsidy: shifts market demand right (or market supplyl right) to 'internalize' a positive externality |
| Nonexclusivity (a failure to establish and enforce property rights) may also cause 'market failure' |
| but in all fairness it wouldn't be 'the market's fault' but a failure of government/society to clearly articulate property rights |
ECO 435
Grids
| "good" | ||
| rival | nonrival | |
| exclusive | private good | club good |
| nonexclusive | "open access" or commons good | public good, large number positive externality |
| a nonrival good can become rival: congested | ||
| imposing restrictions can convert a rival commons into a nonrival club good | ||
| examples: "goods" | examples | |
| rival | nonrival | |
| exclusive | bottled water (food clothing, cars, parking places) | national forest (w/designated hunting season); bridges with tolls; cinemas, private parks, staellite or cable television |
| nonexclusive | great plains (bison), fish stocks in open ocean | sunrises/sets over Grand Canyon; lighthouse; free-to-air television, national defense |
| "bad" | ||
| rival | nonrival | |
| exclusive | private bad, sometimes a 'demerit' good | |
| nonexclusive | negative externality | public bad, large number negative externality |
| examples: "bads" | ||
| rival | nonrival | |
| exclusive | household garbage in modern times; first-hand smoke | water pollution in small lakes; indoor air pollution e.g., second-hand smoke |
| nonexclusive | household garbage in medieval times | noise, greenhouse gases |
ECO 435
