【正文】 sley The Tragedy of the Commons The marginal social cost curve is MSC. The efficient quantity is 300,000 tons per year. At the market equilibrium, there is overfishing and a deadweight loss arises. 169。 2020 Pearson AddisonWesley Negative Externalities: Pollution Taxes The government can set a tax equal marginal external cost. The effect of such a tax is to make marginal private cost plus the tax equal to marginal social cost, MC + tax = MSC. This tax is called Pigovian tax, in honor of the British economist Arthur Cecil Pigou, who first proposed dealing with externalities in this fashion. 169。 2020 Pearson AddisonWesley Negative Externality: Pollution Production and Pollution: How Much? In the market for a good with an externality that is unregulated, the amount of pollution created depends on the equilibrium quantity of the good produced. 169。 2020 Pearson AddisonWesley We burn huge quantities of fossil fuels—coal, natural gas, and oil—that cause acid rain and global warming. We dump toxic waste into rivers, lakes, and oceans. These environmental issues are simultaneously everybody’s problem and nobody’s problem. The fish stocks in the world’s oceans are not owned by anyone. They are mon resources that everyone is free to use. But we are overusing our fish stocks and brings some species into extinction. What can be done to conserve the world’s fish stocks? 169。 2020 Pearson AddisonWesley Negative Externality: Pollution Effects of Pollution While the facts about the sources and trends in air pollution are not in doubt, there is disagreement about the effects of air pollution. The least controversial is acid rain caused by sulphur dioxide and nitrogen oxide emissions from coal and oilfired generators of power stations. Acid rain begins with air pollution, and it leads to water pollution and damages vegetation. 169。 2020 Pearson AddisonWesley Negative Externality: Pollution Property Rights Sometimes externalities arise because of the absence of property rights. Property rights are legally established titles to the ownership, use, and disposal of factors of production and goods and services that are enforceable in the courts. 169。 2020 Pearson AddisonWesley Negative Externality: Pollution CapandTrade Each firm is assigned a permitted amount of pollution per period and firms trade permits. The market price of a permit confronts polluters with the social marginal cost of their actions and leads to an efficient oute. This method was used successfully to decrease lead pollution in the United States. 169。 2020 Pearson AddisonWesley The Tragedy of the Commons Production Quotas By setting a production quota at the efficient quantity, the resource might be used efficiently. Figure shows the profit on the marginal ton of fish. A fisher who cheats will increase his profit. There is an incentive to overfish. 169。 2020 Pearson AddisonWesley –Market for Labor Services –Labor services are the physical and mental work effort that people supply to produce goods and services. –A labor market is a collection of people and firms who trade labor services. –The price of labor services is the wage rate. –Most labor markets have many buyers and many sellers and are petitive. In these labor markets, the wage rate is determined by supply and demand. The Anatomy of Factor Markets 169。 2020 Pearson AddisonWesley ?The firm maximizes its profit by hiring the quantity of labor at which VMP = the wage rate. ?If VMP exceeds the wage rate, the firm can increase profit by employing one more worker. ?If VMP is less than the wage rate, the firm can increase profit by firing one worker. ?Only if VMP equals the wage rate is the firm maximizing profit. The Demand for a Factor of Production 169。 2020 Pearson AddisonWesley ?The Market Supply of Labor –An Individual’s Labor Supply Decision –People allocate their time between leisure and labor and this choice, which determines the quantity of labor supplied, depends on the wage rate. –A person’s reservation wage is the lowest wage rate for which he or she is willing to supply labor. –As the wage rate rises above the reservation wage, the household changes the quantity of labor supplied. Labor Markets 169。 2020 Pearson AddisonWesley ?Labor Market Equilibrium with a Union –Unions try to restrict the supply for union labor and raise the wage rate. –But this action also decreases the quantity of labor demanded. –So the union tries to increase the demand for labor. Labor Markets 169。 2020 Pearson AddisonWesley –For more than 150 workers, the supply of labor curve is S and the marginal cost of labor curve is MCL. –With the minimum wage, the monopsony increases the quantity of labor hired and pays a higher wage rate than with no minimum wage rate. Labor Markets