Questions on Last Week
Questions on Last Week
Questions on "The Problem of Social Cost
Questions on “The Problem of Social Cost
"Externalities"are Jointly Caused
“Externalities” are Jointly Caused
Price Theory Framework Cost of inputs=their value in the best alternative use Price of outputs=their value to those who buy them
Price Theory Framework • Cost of inputs=their value in the best alternative use • Price of outputs=their value to those who buy them
Farmer and Rancher If Rancher liable for damage to crops If Rancher not liable If no bargaining possible
Farmer and Rancher •If Rancher liable for damage to crops •If Rancher not liable •If no bargaining possible