A Rainbow of Words

Monday, September 08, 2008

i had a title which i forgot. ://

heyy ((:

lol. yes yes, i really had something i wanted to blog abt. but i dun remember what it is now. lol.

i'm only allowed 10mins here. before i go shower and start revising again! which i'm really FAR behind time! :O what if i cant answer the questions tmr eh? :///

okayy, actually, i tink i remember le. i wanted my title to be EXTERNALITITES then i can type all my definitions and all here. and if anyone who's having econs is reading my blog, will get to recap abit too. HEH! but i cant exactly draw the graphs here can i? LOL.

okayy, externality refers to the cost and benefits that affects someone not directly involved in the production or consumption of a good, and which occurs without compensation.

external benefit in consumption is like vaccination and education
external benefit in production is like re-training of labour and innovation

productive efficient: maximum output produced with given resources. (P=AC)
Allocative efficient: right kind of goods produced in right amount (P=MC)
- impossible to reallocate resources to make one person better off without making another person worse off.

Merit goods: goods which govt feel are socially desirable and that ppl will under consume if nt subsidized.

public goods are goods where the positive externalities are so great that the free market may not produce at all.
-a pure public good has features of non excludability and non rivalry.
- non excludability means it is either not economically feasible or not possible to exclude anyone from using the good once it is provided.
-it is collectively consumed and it is not possible to assign property rights to only those who pay for the good.
- non-paying consumers cannot be excluded from using the good.

non-rivalry means that the consumption of the good/service by one person does not diminish another person's ability to consume the same good/service.
-once the good is produced, addition resource cost to provide for another person benefitting frm consuming the good is ZERO.

property of non excludability gives rise to the free rider problem.
free rider problem: where it is possible for a person to consume a public good without having to pay for it.

okayy, tt's enuff, i tink if i continue, this post is gonna bore the non-econs ppL! LOL..

i will post photos okayy??

((:

in HIS love.
CHARI ** ((:

p.s: pls keep me in prayer!! thanks!

Slid down the rainbow at 19:04

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