195 Midterm Study Guide 2 Flashcards
Negative Externalities
When an individual or firm engages in some activity that imposes a cost on society that does not have to be paid by the party generating the externality
Externality (page 109)
Cost or benefits that are imposed on neighboring firms or residents(Noise, pollution, additional traffic congestion)
Property Rights
- Legal right to exercise control over some resources
- Most basic level, a property right involves control over-literal property
- Bestow certain rights; right to use the property, use it collateral, right to sell, transfer use to other parties
- seldom absolute
Transaction costs
cost of conducting transactions
Prisoner’s dilemma (page 116)
depicts how to rational agents each trying to maximize his own utility but unable to make binding agreement with the other, behave in a way that makes both of them worse off
Collective action problems
- Shirking
- Free Riders
- Tragedy of the Commons
Shirking
Collective action problem when there are too many ‘rational’ individual shirkers that cause no one left to do the work that made everyone in the group better off
Free Riders
Those who enjoy the benefits of group action without contributing to the effort (Or w/o resisting from some harmful activity
Tragedy of the Commons
Grassy area (Common) used for grazing livestock. Everyone benefits from it, but if they let too many animals there then it is depleted. If depleted no one can use.
Alleviating collective action problems. (Page 130)
- Regulation
- Use government to provide goods
- Privatize the resource
- Rely on a “Privileged group”
- Provide “Select Incentives”
- Develop Informal Solutions
California’s Housing Crisis (Facts) [class slides 1/22/21]
- Housing need from 2015-2025 is 180,000 but in 2016 was only at 100,000
- Home ownership % gone down since 2006
- record high prices outside of the 07 bubble
- Esspecially impacts those from POC communities
- CA scores high with people in homelesness
CA Housing Crisis (Barriers to solving)
- Single family zoning
- permit process is difficult/time consuming/expensive
- Multiple levels of government to get approved
- Local groth controls (limit numbers of homes, density of new housing, super majorities required)
- Land, labor, materials
- Concerns: Enviormental, gentrification, NIMBY,
CA Housing Crisis (Collective action probm)
NIMBY?
CA Housing Crisis (Cooperation Problem)
NIMBY?
Indicators
Tools used to quantify and evaluate outcomes or performance
Index
combination of indicators
efficiency
degree to which resources are used to generate the most productive outcome
Equity (Page 161)
Equal division of resources and responsibilities
Horizontal Equity
measure of the degree to which similar persons and situations are treated equally
Vertical Equity
degree to which the rich pay more than the poor (poor receive greater social benefits than the wealthy)
-Graduated Tax and social welfare policies
Intergenerational Equity
fairness in the way that policies treaty different generations
-social security
Efficiency equity trade-off
Efficiency is about using resources in a way that creates the largest possible cake, regardless of how the slides are cut and allocated. Equity is about dividing the pieces in a way that society deems fair.
Three strikes law (facts) [1/29/21]
- Founded after murder of Kimber Reynolds & later Polly Klass case done by persons w/ previous convictions (put on ballot)
- AB 971 amended ballot to include non violent offenses as a strike
- Prop 184 passed
- increase prison sentence of repeat offenders (Minimum 25 years, could be min of 50 years if 2 third strike offenses)
- No time since prior considered, limited good time credit
- Argued as a deturent & a reducing criminals on street (opponents argued it went too far)
Three Strikes Law (Outcomes)
- Leg analyist office in 2005 said it increased operating costs by 1/2 bil (tho less than estimate of 3 bil because some prosecutors dismissed prior strikes & variation in county enforcement)
- Estimated it cost 1.1 M for jailing costs, life sentences 1.8 million
- Overcrowding in prisons (tho not only factor)
- Increase rate in length of prison stay
- disparities in who was imprisoned by race/ethnicity
- decline in crime rate continued (though had already started & saw nation wide fall, so can’t established if they’re connected)
