Scot Wick Blog

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 4 The Economics of the Public Sector Chapter 11 of 36 Public Goods and Common Resources         Section 5 of 14 … Per Figure 1: Goods can be grouped into four categories using two characteristics. A good is excludable if people can be prevented from using it A good is rival in consumption if one person's use of the good lessens other people's use of it.   … Consider a fireworks show to understand how public goods differ from other goods and the problems they present for society. Fireworks are a public good, because · not excludable, it’s not possible to prevent someone from seeing them · not rival in consumption, one person's enjoyment of them doesn’t reduce other people’s enjoyment … The citizens of Smalltown have a fireworks show each Fourth of July. Each of the 500 residents place ...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 4 The Economics of the Public Sector Chapter 11 of 36 Public Goods and Common Resources         Section 4 of 14 … As shown in Figure 1, g oods can be grouped into four categories using two characteristics. · a good is excludable if people can be prevented from using it · a good is rival in consumption if one person's use of the good lessens other people's use of it.   … But the boundary between the characteristics and categories is sometimes unclear. Fish in an ocean may not be excludable because monitoring and controlling fishing is difficult. A large coast guard enforcing limits can make fish partly excludable. Although fish are generally rival in consumption this would be less true if the population of fishermen is small relative to the population of fish. … Consider the C and D catego...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 4 The Economics of the Public Sector Chapter 11 of 36 Public Goods and Common Resources Section 3 of 14 … Figure 1 - Four Types of Goods Goods can be grouped into four categories using two characteristics. -a good is excludable if people can be prevented from using it -a good is rival in consumption if one person's use of the good lessens other people's use of it. … How well markets work to provide the goods people demand depends on the type of good. A market is able to provide the efficient number of ice-cream cones. The movable price of ice-cream cones balances supply and demand at an equilibrium. At equilibrium the sum of producer and consumer surplus is maximized. … Figure 1 assigns goods to four categories using these two characteristics -A- Private Goods are excludable and rival in consumption. An ice-cream cone is excludable · because it is possible to prevent someone else from eating ...

  Why Do Some Businesses Close Even Though They Are Profitable? First, watch this short video: https://www.youtube.com/watch?v=a0nUWrnuUdo … Per Figure 1 economists and accountants measure costs and profits differently. Economist view of the firm: An economist measures a firm’s economic profit as · the firm's revenue (sales) · minus the firm’s explicit + implicit costs … Explicit costs are those that require a money outflow. Implicit cost includes money the firm owner could otherwise be making, including · profit from other investments such as in the stock market · working at a job for another firm … An accountant measures the firm's accounting profit as · the firm's revenue · minus only the firm's explicit, money outflow for costs of running the business Because the accountant ignores the implicit costs, accounting profit is larger than economic profit. … Per Figure 2 explicit costs are fixed at $800 and implicit costs are fixed at $700. From an accountant’s viewpoint:...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 4 The Economics of the Public Sector Chapter 11 of 36 Public Goods and Common Resources Section 2 of 14 … An old song goes "the best things in life are free." There are many goods the songwriter could have been thinking of. Nature gives us some, including rivers, mountains, beaches, lakes, and oceans. Government provides others, such as playgrounds and parks. Most goods in an economy are private not public and are allocated in markets. In markets buyers pay for what they receive and sellers are paid for what they provide. For private goods prices are the signals that guide decisions of buyers and sellers. These decisions lead to an efficient allocation of resources. … When goods are public and free of charge market forces that allocate resources are absent. Here we will examine the problems that arise for the allocation of resources when there are goods without market prices. When a good doe...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 4 The Economics of the Public Sector Chapter 11 of 36 Public Goods and Common Resources Section 1 of 14 … Chapter 11 topics: The Different Kinds Of Goods Public Goods The Free-Rider Problem Some Important Public Goods The Difficult Job Of Cost-Benefit Analysis How Much Is A Life Worth? Common Resources The Tragedy Of The Commons Some Important Common Resources The Bloomberg Plan Why The Cow Is Not Extinct The Importance Of Property Rights … … property rights zaisan-ken 財産権

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 4 The Economics of the Public Sector Chapter 10 of 36 Externalities Section 18 of 18 … Economic externalities, summary. Mostly from ChatGPT: Economic externalities refer to the costs or benefits that affect third parties who are not directly involved in a transaction or activity. These can be positive or negative. They occur when the actions of individuals or firms have unintended side effects on others, leading to market outcomes that are not socially optimal. … The Two Types of Economic Externalities -Negative Externalities: Occur when an activity imposes costs on third parties. Examples: Air pollution from factories affecting nearby residents. Traffic congestion caused by excessive driving. Noise pollution from construction. -Positive Externalities: Occur when an activity generates benefits for third parties. Examples: Education improving society’s overall productivity. Vaccination reducing the spr...

  Mostly summarized from Gregory Mankiw’s Principles of Economics, 5th Ed. PART 4 The Economics of the Public Sector Chapter 10 of 36 Externalities Section 17 of 18 … The Coase theorem states the private market in some cases can deal with externalities effectively. If private parties can bargain over the allocation of resources at no cost the private market, they will solve the problem of externalities and allocate resources efficiently. … Suppose Dick owns a dog “Bud.” Bud barks and disturbs neighbor Jane. Dick benefits from owning the dog but it imposes a negative externality on Jane. There are two possible outcomes · Dick gives up Bud · Jane continues to suffer from the noise of Bud's barking … A social planner considering the two alternatives would compare the benefit Dick gets from the dog to the cost Jane bears from the barking. If the benefit exceeds the cost it is efficient for Dick to keep the dog and Jane to endure the barking. If Jane’s cost exceeds Dick’s benefit he m...

  What Is Bitcoin and What Are Its Advantages and Disadvantages? Mostly from Investopedia and ChatGPT: Bitcoin is a decentralized digital currency invented in 2008 by an anonymous person or group of people using the pseudonym Satoshi Nakamoto. It was introduced as an open-source software in 2009, and since then, it has become the first and most well-known cryptocurrency. … Unlike traditional fiat currencies, such as the US dollar or the euro, Bitcoin operates on a decentralized network called the blockchain. The blockchain is a distributed ledger that records all transactions made with Bitcoin. This technology ensures transparency, security, and prevents double-spending, where the same Bitcoin is used for multiple transactions. … Bitcoin is created through a process called mining. Miners use powerful computers to solve complex mathematical problems that validate transactions and add them to the blockchain. As a reward for their efforts, miners receive newly created bitcoins and tra...