Acceptable logotype

ECO 3620. Environmental Economics

Market Failure

Public Goods

  1. Nonrivalry and nonexcludability - "the spectrum of public and private goods"
  2. Marginal social benefit = vertical summation of marginal private benefit
  3. Inefficiency - role for government intervention

Negative Externality

  1. Marginal social cost = marginal private cost + marginal external cost
  2. Types of negative externality - firm, firm; firm, household; household, household
  3. Inefficiency - role for government intervention

Property Rights

  1. Negative externality with public goods
  2. Open access externality - nonexcludable and rival resources (e.g., the fishery)