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Quizzes:explaining phrases or answering questions Pareto improvement & Pareto efficient Contract curve Production/ Utility possibilities curve Social welfare function The First Fundamental Theorem of Welfare Economics The Second Fundamental Theorem of Welfare Economics Why does it impair efficiency to interfere with market price? Try to explain the inefficiency when some individuals or firms have the market power. prepare lessons before class Price discrimination Consumer equilibrium Part 2 Public Expenditure: Public Goods and Externalities Ch4 Public Goods Ch5 Externalities Ch6 Political Economy Ch7 Education Ch8 Cost-benefit Analysis CHAPTER 4 Public Goods Question? What characteristic of national defense makes it an appropriate government responsibility? Are there other goods and services that partake of this characteristic, and should the government provide them as well? Which goods and services should be provided by the public sector? Which services that are currently provided by public sector should be privatized? Sections: Public Goods Defined Efficient Provision of Public Goods The Privatization Debate Public Goods and Public Choice Characteristics of Goods Excludable v Nonexcludable Excludable – preventing anyone from consuming the good is relatively easy Nonexcludable – preventing anyone from consuming the good is either very expensive or impossible Rival v Nonrival Rival – once provided, the additional resource cost of another person consuming the good is positive Nonrival – once provided, the additional resource cost of another person consuming the good is zero Types of Goods Noteworthy Aspects of Public Goods Even though everyone consumes the same quantity of the good, it need not be valued equally by all Classification as a public good is not absolute; it depends on market conditions and the state of technology impure public good A commodity can satisfy one part of the definition of a public good but not the other Some things tha
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