保特瓶装之饮料.pptVIP

Macro Lecture 1 (S2005) Outline Ch.10 – Externalities 外部性 Next week: Ch.11 (Public Goods and Commons) Ch.10 -- Externalities Motivation Adam Smith’s metaphor: invisible hand in markets allocating scarce resources, achieving equilibrium states, and maximizing total benefits Examples: Cigarettes; 水泥: supply and demand But what about the pollution and resulting health problems? Can the invisible hand take care of them? Externalities (continued) Once externalities are identified and well recognized, how shall market prices and quantities respond to it? Consider: 檳榔 保特瓶裝之飲料 保利龍盛放之餐盒 大量的請假 Externalities (continued) Definitions Externality: the uncompensated impact of one party’s actions on the well-being of a bystander (shorter version) One party neither pays nor receives any compensation the affected party (as a bystander) Negative externality -- adverse Positive externality -- beneficial Externalities (continued) Examples? Negative externality -- adverse Exhaust from automobiles Barking dogs (To whom will it be positive?) 製磚、水泥、煉油、一般重工業 Night markets Positive externality -- beneficial Restored historic buildings (To whom will it be positive?) Research into new technologies or methods Externalities (continued) More examples? Negative externality -- adverse Noise from another classroom More? Positive externality -- beneficial Noise from another classroom More? Externalities (continued) Internalizing an externality Altering incentives so that people take account of the external effects of their actions (e.g., tax) Are we talking about negative externalities only? Reproduce figure 2 on p.206 below resemble “消費稅由店家代徵” Clarify on the chalkboard! Externalities (continued) Before we elaborate on tradable pollution permits EPA: Environmental Protection Agency The government agency in US carrying out the task of developing and enforcing regulations aimed at protecting the environment. (p.212) Trivial take-home exercise: