Environmental Market Failures Flashcards
Excludable goods
One can, at low cost, prevent non payers from consumption. ex: all consumer goods
Non-excludable goods
Difficult to prevent people from consuming. ex: radio stations and resources
Depletable
Consumption means another can not use it. ex: t-shirt
Non-depletable
Consumption does not affect supply available to others. ex: movie
Private goods
Depletable and excludable. ex: candy bar
Toll goods
Non-depletable and excludable. ex: movie
Market failure
Market not allocating resources in ways that create the most benefit
Global commons / open access
Depletable and non-excludable. Vital resources that belong to all of humanity (not one country). ex: fisheries, space
Public goods / free rider
Non-depletable and non-excludable. Joint use and unrestricted. ex: biodiversity
Positive externality
Action positively impacts third party. Under produced and consumed
Negative externality
Action negatively impacts third party who have no choice or compensation. Overly produced and consumed
Externality market failure
Consumers do not pay full societal cost, and third parties take that burden. Products are too cheap because consumers don’t pay for externalities and products become over produced/consumed.
Subsidy
Financial support from the government for small businesses or individuals to increase public welfare
Perverse subsidies
A subsidy thats net effect reduces public welfare. ex: agriculture subsidies (cause farmers to over-farm)
Dominant social paradigm
Ideologies that guide governance and roles of individuals in society. Determines the ways that people interpret the world around them
