财政学英文课件 chapter 4 Efficiency Public Goods and Externalities.pptVIP

Chapter 4Efficiency: Public Goods and Externalities Chapter outline The rationale for government production of goods and services. 1.Public Goods, Private Goods, and Goods with Externalities Nonrivalry Nonexcludability Free Riding and Public Goods Some Qualifications Free-riding and the Street Lights (A True Story) Identifying Public Goods Public Goods Versus Private Goods Demand, Price, and Level of Output Who Pays for Public Goods? Local Public Goods, Club Goods, and Congestible Goods Externalities Positive Externalities Negative Externalities Creative Solutions Property Rights and the Coase Theorem Tax Incentives and Vouchers The Garbage Dilemma Shifting the Demand Curve Other Providers 1. Public Goods, Private Goods, and Goods with Externalities Public goods have two characteristics: nonrivalry and nonexcludability ①nonrivalry A good that is nonrival in consumption can be consumed by any number of people simultaneously ,without diminishing the amount available to be consumed by others. ②nonexcludability This term describes the inability to keep people ,specifically nonpayers,from consuming the good or service. It is the problem of excluding nonpayers rather than nonrivalry that is often the determining factor in calling for public production. Exclusion technique:innovations in technology and high fine. 2.Identifying Public Goods All public goods can be classified according to the degree of rivalry and excludability into four classes. low rivalry,low excludability goods are public goods; high rivalry,high excludability goods are private goods; low rivalry,high excludability goods are local public goods or club goods; high rivalry,low excludability goods are those that create positive or negative externalities. ①Public goods versus private goods ②Demand,price,and level of output For public goods,demand is added vertically rather than horizontally to determine the optimum quantity.